GeographyArea : 727 sq. km. (274 sq. mi.) ; approximately four times the size of Washington, DC. Bahrain is an archipelago of 36 islands located off the eastern coast of Saudi Arabia. The four main islands are joined by causeways, and make up about 95% of the total land area.Cities : Capital—Manama (pop. 148,000 ; 2002 est.). Other cities—Al Muharraq.Terrain : Low desert plain (highest elevation point—122 m).Climate : Hot and humid from May-September, with average highs ranging from 30o-40o C (86o-104o F). Maximum temperatures average 20o-30o C (68o-86o F) the remainder of the year.

GovernmentType : Constitutional hereditary monarchy.Independence : August 15, 1971 (from the United Kingdom).Constitution : Approved and promulgated May 26, 1973 ; suspended on August 26, 1975 ; the National Action Charter was approved by a national popular referendum on February 14-15, 2001, and a new constitution was issued on February 14, 2002.Branches : Executive—King (chief of state) ; Prime Minister (head of government) ; Council of Ministers (cabinet) is appointed by the King and headed by the Prime Minister. Legislative—The bicameral parliament (al-Majlis al-Watani) consists of a 40-member elected Council of Representatives and a 40-member Shura (Consultative) Council appointed by the King. Members of both chambers serve 4-year terms. Judicial—High Civil Appeals Court. The judiciary is independent with right of judicial review.Administrative subdivisions : 12 municipalities (manatiq) : Al Hidd, Al Manamah, Al Mintaqah al Gharbiyah, Al Mintaqah al Wusta, Al Mintaqah ash Shamaliyah, Al Muharraq, Ar Rifa’ wa al Mintaqah al Janubiyah, Jidd Hafs, Madinat Hamad, Madinat ‘Isa, Juzur Hawar, Sitrah.Suffrage : Universal at age 18.

PEOPLEBahrain is one of the most densely populated countries in the world ; about 89% of the population lives in the two principal cities of Manama and Al Muharraq. Approximately 66% of the indigenous population is originally from the Arabian Peninsula and Iran. Bahrain has a sizeable foreign labor force. The government’s policies on naturalization remain controversial. In June 2002, the King issued a decree allowing citizens of the Gulf Cooperation Council (GCC) to take up dual Bahraini nationality. Opposition political groups charge that the government is granting citizenship to foreign nationals who have served in the Bahraini armed forces and security services to alter the demographic balance of the country, which is primarily Shi’a. According to passport officials, about 40,000 individuals have been naturalized over the past 50 years.

The indigenous population is 98% Muslim. Although some two-thirds of the indigenous population is Shi’a Muslim, the ruling family and the majority of government, military, and corporate leaders are Sunni Muslims. The small indigenous Christian and Jewish communities make up the remaining 2% of the population. Roughly half of foreign resident community are non-Muslim, and include Christians, Hindus, Baha’is, Buddhists and Sikhs.

Bahrain has invested its oil revenues in developing an advanced educational system. The first public schools for girls and boys were opened in the 1920s. The government continues to pay for all schooling costs. Although school attendance is not compulsory, primary and secondary attendance rates are high, and literacy rates are currently among the highest in the region. Higher education is available for secondary school graduates at the Bahrain University, Arabian Gulf University and specialized institutes including the College of Health Sciences — operating under the direction of the Ministry of Health — which trains physicians, nurses, pharmacists, and paramedics. The government has identified providing educational services to the Gulf Cooperation Council as a potential economic growth area, and is actively working to establish Bahrain as a regional center for higher education.

HISTORYThe site of the ancient Bronze Age civilization of Dilmun, Bahrain was an important center linking trade routes between Mesopotamia and the Indus Valley as early as 5,000 years ago. The Dilmun civilization began to decline about 2,000 B.C. as trade from India was cut off. From 750 B.C. on, Assyrian kings repeatedly claimed sovereignty over the islands. Shortly after 600 B.C., Dilmun was formally incorporated into the new Babylonian empire. There are no historical references to Bahrain until Alexander the Great’s arrival in the Gulf in the 4th century B.C. Although Bahrain was ruled variously by the Arab tribes of Bani Wa’el and Persian governors, Bahrain continued to be known by its Greek name Tylos until the 7th century, when many of its inhabitants converted to Islam. A regional pearling and trade center, Bahrain came under the control of the Ummayad Caliphs of Syria, the Abbasid Caliphs of Baghdad, Persian, Omani and Portuguese forces at various times from the 7th century until the Al Khalifa family, a branch of the Bani Utbah tribe that have ruled Bahrain since the 18th century, succeeded in capturing Bahrain from a Persian garrison controlling the islands in 1783.

In the 1830s the Al Khalifa family signed the first of many treaties establishing Bahrain as a British Protectorate. Similar to the binding treaties of protection entered into by other Persian Gulf principalities, the agreements entered into by the Al Khalifas prohibited them from disposing of territory and entering into relationships with any foreign government without British consent in exchange for British protection against the threat of military attack from Ottoman Turkey. The main British naval base in the region was moved to Bahrain in 1935 shortly after the start of large-scale oil production.

In 1968, when the British Government announced its decision (reaffirmed in March 1971) to end the treaty relationships with the Persian Gulf sheikdoms, Bahrain initially joined the other eight states (Qatar and the seven Trucial Sheikhdoms now the United Arab Emirates) under British protection in an effort to form a union of Arab emirates. The nine sheikhdoms still had not agreed on terms of union by 1971, however, prompting Bahrain to declare itself fully independent on August 15, 1971.

Bahrain promulgated a constitution and elected its first parliament in 1973, but just 2 years later, in August 1975, the Amir disbanded the National Assembly after it attempted to legislate the end of Al-Khalifa rule and the expulsion of the U.S. Navy from Bahrain. In the 1990s, Bahrain suffered from repeated incidents of political violence stemming from the disaffection of the Shi’a majority. In response, the Amir instituted the first Bahraini cabinet change in 20 years in 1995 and also increased the membership of the Consultative Council, which he had created in 1993 to provide advice and opinion on legislation proposed by the cabinet and, in certain cases, suggest new laws on its own, from 30 to 40 the following year. These steps led to an initial decline in violent incidents, but in early 1996 a number of hotels and restaurants were bombed, resulting in several fatalities. Over 1,000 people were arrested and held in detention without trial in connection with these disturbances. The government has since released these individuals (see Government and Political Conditions Section below for details).

GOVERNMENT AND POLITICAL CONDITIONSShaikh Hamad bin Isa Al Khalifa acceded to the throne in March 1999, after the death of his father Shaikh Isa bin Hamad Al Khalifa, Bahrain’s ruler since 1961. He championed a program of democratic reform shortly after his accession. In November 2000, Shaikh Hamad established a committee to create a blueprint to transform Bahrain from a hereditary emirate to a constitutional monarchy within 2 years. The resulting « National Action Charter » was presented to the Bahraini public in a referendum in February 2001. In the first comprehensive public vote in Bahrain since the 1970s, 94.8% of voters overwhelmingly endorsed the charter. That same month, Shaikh Hamad pardoned all political prisoners and detainees, including those who had been imprisoned, exiled or detained on security charges. He also abolished the State Security Law and the State Security Court, which had permitted the government to detain individuals without trial for up to 3 years.

On February 14, 2002, 1 year after the referendum endorsing his National Action Charter, Shaikh Hamad pronounced Bahrain a constitutional monarchy and changed his status from Amir to King. He simultaneously announced that the first municipal elections since 1957 would be held in May 2002, and that a bicameral parliament, with a representative lower house, would be reconstituted with parliamentary elections in October 2002. As part of these constitutional reforms, the government created an independent financial watchdog empowered to investigate cases of embezzlement and violations of state expenditure in July 2002.

Turnout for the May 2002 municipal elections was 51%, with female voters making up 52% of voters. Turnout for the 2002 parliamentary elections — the first in almost 3 decades — was 53% in the first round and 43% in the second round, despite the fact that four political societies, including the largest Shi’a society, organized a boycott to protest constitutional provisions enacted by the King that gave the appointed upper chamber of parliament voting rights equal to the elected lower chamber. The new parliament held its first joint sitting in December 2002. Bahrain held its second set of parliamentary and municipal elections in November and December 2006. All registered political societies participated in the elections and a Shi’a society, Al Wifaq, represented the largest single bloc inside the Council of Representatives. Thirty-two of the Council’s 40 members represented Sunni and Shi’a Islamist societies. One woman, Lateefah Al-Qauod, ran uncontested and became the first woman elected to parliament in Bahrain. Parliamentary and municipal elections were held again in 2010.

In February and March 2011, Bahrain experienced a period of civil unrest inspired in part by recent revolutions in Egypt and Tunisia and in part by local dissatisfaction with government policies. Bahraini security forces moved quickly to restore order. Bahrain hosted military forces from Saudi Arabia, U.A.E., and Kuwait under the aegis of the GCC Peninsula Shield Force to secure critical infrastructure while Bahraini security forces responded to the unrest. On June 29, 2011, King Hamad called for the creation of the Bahrain Independent Commission of Inquiry (BICI) to investigate allegations of human rights violations during this period. The five-person commission issued a 500-page report on November 23 that detailed abuses and offered recommendations. The Government of Bahrain has taken steps to implement a number of these recommendations, but oppositionists claim the government has moved too slowly on reform.

Bahrain has a complex system of courts, based on diverse legal sources, including Sunni and Shi’a Sharia (religious law), tribal law, and other civil codes and regulations created with the help of British advisers in the early 20th century. In 2001, Shaikh Hamad created the Supreme Judicial Council to regulate these courts and separate the administrative and judicial branches of government.

ECONOMYThe first Gulf state to discover oil, Bahrain’s reserves are expected to run out in 10-15 years. Accordingly, Bahrain has worked to diversify its economy over the past decade and continues to grow its oil production to 100,000 barrels per day over the next five years. It currently operates at approximately 42,000 barrels per day. Revenues from oil and natural gas currently account for approximately 25% of GDP yet currently provide about 76% of government income. The state-owned Bahrain Petroleum Company refinery built in 1935, the first in the Gulf, has a capacity of about 260,000 b/d. Saudi Arabia provides most of the crude for refinery operation via pipeline. Through an agreement with Saudi Arabia, Bahrain also receives half of the net output and revenues from Saudi Arabia’s Abu Saafa offshore oilfield.

The Bahrain National Gas Company operates a gas liquefaction plant that utilizes gas piped directly from Bahrain’s oilfields. Gas reserves should last about 50 years at present rates of consumption. However, rising domestic demand spurred by a recent development boom has highlighted the need to increase gas supplies. The Gulf Petrochemical Industries Company is a joint venture of the petrochemical industries of Kuwait, the Saudi Basic Industries Corporation, and the Government of Bahrain. The plant, completed in 1985, produces ammonia and methanol for export. Growth in the hydrocarbons sector will be contingent upon new discoveries — Bahrain awarded exploration rights to Malaysia’s Petronas and the U.S.’s Chevron Texaco after the resolution of Bahrain’s long-standing territorial dispute with Qatar, but no meaningful finds have been announced to date. Bahrain’s other industries include the majority state-owned Aluminum Bahrain (Alba) —which operates the largest aluminum smelter in the world outside Eastern Europe with an annual production of about 870,000 metric tons (mt) after the completion of an expansion program — and related factories, such as the Aluminum Extrusion Company and the Gulf Aluminum Rolling Mill. Other plants include the Gulf Industrial Investment Company’s iron ore pelletizing plant (11 million tons annually) and a shipbuilding and repair yard.

Bahrain’s development as a major financial center has been the most widely heralded aspect of its diversification effort. Bahrain is a regional financial and business center ; international financial institutions operate in Bahrain, both offshore and onshore, without impediments, and the financial sector is currently the largest contributor to GDP at 23% in 2010. Between 2002 and 2010, the industry tripled in size to $224 billion. With over 13,000 people employed in this sector, financial services remain a pillar of Bahrain’s economy. Over 152 offshore banking units and representative offices are located in Bahrain, as well as 65 American firms. Bahrain has also made a concerted effort to become the leading Islamic finance center in the Arab world, standardizing regulations of the Islamic banking industry. It currently has 26 Islamic commercial, investment and leasing banks as well as Islamic insurance (takaful) companies — the largest concentration of Islamic financial institutions in the Middle East.

Bahrain is working to develop other service industries such as information technology, healthcare, and education. The government has men dit oil revenues to build an advanced infrastructure in transportation and telecommunications. The state monopoly — Batelco — was broken in April 2003 following the establishment of the Telecommunications Regulatory Authority (TRA). Since that time, the TRA has granted some 171 licenses although market access continues to be limited.

Bahrain plans to expand its airport, one of the busiest in the Gulf. More than 8.8 million passengers transited Bahrain International Airport in 2010. A modern, busy port offers direct and frequent cargo shipping connections to the U.S., Europe, and the Far East. To boost its competitiveness as a regional center, Bahrain is building a new port and has privatized port operations.

The government of Bahrain moved toward privatizing the production of electricity and water by licensing Al Ezzal to construct an independent power plant at a cost of $500 million. The company commenced operations in May 2006. In January 2006, the government announced the sale of the Al Hidd Power Plant for $738 million to Hidd Power Company, a consortium of British, Japanese, and Belgian companies.

Regional tourism is also a significant source of income. The government continues to favor large-scale tourism projects. It opened the only Formula One race track in the Middle East in 2004, and has awarded tenders for several tourist complexes. New hotel and spa projects are progressing within the context of broader real estate development, much of which is geared toward attracting increased tourism. Tourism declined following the 2008 global financial crisis and further suffered during the spring 2011 unrest.

Government revenues continue to be largely dependent on the oil industry. Bahrain has received significant budgetary support and project grants from Saudi Arabia, Kuwait, and the United Arab Emirates. Social program spending, namely housing, continues to be a priority for Bahrain. High oil prices continue to provide sufficient funding for these programs in the short term, though Bahrain ran a deficit in their 2011 budget of $3.1 million.

The government has also started to extend protections to workers. Private sector employees won permission to form unions in late 2002 ; King Hamad has given his tentative approval for the formation of unions in government departments. In June 2006, Bahrain passed laws legalizing the existence of multiple trade federations and codifying several protections for workers engaged in union activity, which is the in the process of being further amended to allow the Ministry of Labor to determine which federation would represent Bahrain in international forums. As part of the government’s labor reform program, it has formed a Labor Market Regulatory Authority and established a fund to support the training of Bahraini workers.

In 2006, bilateral trade exceeded $1 billion for the first time, representing almost 50% growth over 2005. U.S.-Bahrain Free Trade Agreement took effect on August 1, 2006 and is generating increased U.S. commercial interest in Bahrain. Bilateral trade between the U.S. and Bahrain has increased each since the signing of the FTA, reaching nearly $830 million USD in 2010.

DEFENSEThe Bahrain Defense Force (BDF) numbers about 13,000 personnel and consists of army, navy, air force, air defense, and royal guard units. The public security forces and the coast guard are separate from the BDF and report to the Ministry of the Interior. Bahrain also has a national guard that consists of about 2,000 personnel. Bahrain’s defense spending has remained steady since 1999. The government spends around $630 million annually on the military, about 20% of current expenditures. The parliamentary process has produced spirited debate over government spending, particularly defense spending, but no actual reductions.

With the help of the U.S. and the Gulf Cooperation Council, Bahrain has made significant efforts to upgrade its defense systems and modernize its armed forces over the last 20 years. In 1982, the GCC gave Bahrain $1.7 billion for this purpose. Since the 1991 Gulf War, the U.S. has provided military and defense technical assistance and training to Bahrain from Foreign Military Sales (FMS), commercial sources, and excess defense article sales (EDA), and under the International Military and Education Training (IMET) program. The U.S. Office of Military Cooperation in Bahrain is attached to the U.S. Embassy and manages the security assistance mission. U.S. military sales to Bahrain since 2000 total $1.4 billion. Principal U.S. military systems acquired by the BDF include one FFG-7 Class Frigate, 2 Mk-V Fast Patrol Boats, 8 Apache helicopters, 8 UH-60M Blackhawk helicopters, 54 M60A3 tanks, 22 F-16C/D aircraft, 12 Northrup F-5E/F aircraft, 51 Cobra helicopters, 9 MLRS Launchers, 20 M109A5 Howitzers, 1 Avenger AD system, and ADSI integrated with the TPS-59 radar system. Bahrain has received $275 million in FMF, $50 million in Section 1206 Program funded equipment, and $415 million in U.S. EDA acquisition value delivered since the U.S.-Bahraini program began in 1993.

Military exercises are conducted on a regular basis to increase the BDF’s readiness and improve coordination with the U.S. and other GCC forces. The BDF also sends personnel to the United States for military training. This training includes courses from graduate-level professional military education down to entry-level technical training.

FOREIGN RELATIONSSince achieving independence in 1971, Bahrain has pursued a policy of close consultation with neighboring states. Bahrain became a member of the United Nations and the Arab League in 1971. In 1981 it joined its five neighbors — Saudi Arabia, Oman, Kuwait, the U.A.E., and Qatar—to form the strategic Gulf Cooperation Council (GCC). Bahrain has complied with GCC efforts to coordinate economic development and defense and security planning. In December 1994, for example, Bahrain concurred with the GCC decision to drop secondary and tertiary boycotts against Israel. Bahrain also responded positively to Kuwait’s request to deploy the GCC collective defense Peninsula Shield Force during the buildup and execution of Operation Iraqi Freedom (OIF) in 2003.

In addition to maintaining strong relations with its largest financial backers, Saudi Arabia, Kuwait, and the U.A.E., Bahrain has worked to improve its relations with Qatar and has proper, but not warm, relations with Iran. Bahrain-Iran relations have been strained since the discovery in 1981 of an Iran-sponsored coup plot in Bahrain. Bahraini suspicions of the Iranian role in local unrest in the mid-1990s remain. On March 16, 2001, the International Court of Justice (ICJ) announced its judgment on the long-standing maritime delimitation and territorial dispute between Bahrain and Qatar. The binding judgment awarded sovereignty over the Hawar Islands and Qit’at Jaradah to Bahrain and sovereignty over Zubarah (part of the Qatar Peninsula), Janan Island, and Fasht ad Dibal to Qatar. The peaceful settlement of this dispute has allowed for renewed co-operation, including plans to construct a causeway between the two countries.

Bahrain’s strategic partnership with the U.S. has intensified since 1991. Bahraini pilots flew strikes in Iraq during the 1991 Gulf War, and the country was used as a base for military operations in the Gulf. Bahrain provided logistical and basing support to international maritime interdiction efforts to enforce UN sanctions and prevent illegal smuggling of oil from Iraq in the 1990s. Bahrain also provided extensive basing and overflight clearances for a multitude of U.S. aircraft operating in support of Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF). Bahrain deployed forces in support of coalition operations during both OEF and OIF and participates in the International Security Assistance Force (ISAF) in Afghanistan. Bahrain has delivered humanitarian support and technical training to support the reconstruction of the Iraqi banking sector, and has offered support for each stage of Iraq’s political transformation. Bahrain has also cooperated effectively on criminal investigation issues in support of efforts against terrorism ; the Bahrain Monetary Agency (which became the Central Bank of Bahrain in September 2006) moved quickly to restrict terrorists’ ability to transfer funds through Bahrain’s financial system. In October 2006, Bahrain joined the U.S. and 23 other countries in a Proliferation Security Initiative interdiction exercise in the Persian Gulf.

U.S.-BAHRAINI RELATIONSThe American Mission Hospital, affiliated with the National Evangelical Church, has operated continuously in Bahrain for more than a century. Bahrain has also been a base for U.S. naval activity in the Gulf since 1947. When Bahrain became independent, the U.S.-Bahrain relationship was formalized with the establishment of diplomatic relations. The U.S. embassy at Manama was opened September 21, 1971, and a resident ambassador was sent in 1974. The Bahraini embassy in Washington, DC, opened in 1977. In October 1991, Amir Isa bin Salman Al Khalifa made a state visit to Washington. In 2001, Amir Hamad bin Isa Al-Khalifa made his first visit to the U.S. after succeeding his father in 1999. He returned to Washington on an official visit in January 2003. King Hamad made an official visit to Washington in November 2004 to meet with President George W. Bush and cabinet-level officials. In January 2008, President Bush made the first visit by a sitting President to Bahrain. King Hamad visited Washington in March 2008.

Bahrain and the United States signed a Defense Cooperation Agreement in October 1991 granting U.S. forces access to Bahraini facilities and ensuring the right to pre-position material for future crises. Bahrain is the headquarters of the U.S. Navy’s Fifth Fleet. The U.S. designated Bahrain a Major Non-NATO Ally in October 2001. Bahrain and the United States signed a Free Trade Agreement in 2004.

GovernmentType : Republic.Independence : 1922.Constitution : Egypt is operating under a constitutional decree from March 2011. A new constitution is set to be drafted in 2012.Branches : Executive—President (The Chairman of the Supreme Council of the Armed Forces has held presidential authority since February 2011 and is slated to hand over that function to a new president once presidential elections are held, likely by June 30, 2012), Prime Minister, Cabinet. Legislative—People’s Assembly (498 elected members and up to 10 presidentially appointed), and Shura (consultative) Council (180 elected members, and 90 presidentially appointed). The two houses of Egypt’s parliament—the People’s Assembly and the Shura Council—were dissolved in February 2011, but will be seated again in 2012 after elections are completed for each house.Administrative subdivisions : 27 governorates.Suffrage : Universal at 18.

PEOPLE AND HISTORYEgypt is the most populous country in the Arab world and the second-most populous on the African continent. Nearly all of the country’s 80 million people live in the following locations : Cairo and Alexandria ; elsewhere on the banks of the Nile ; in the Nile delta, which fans out north of Cairo ; and along the Suez Canal. These regions are among the world’s most densely populated, containing an average of over 3,820 persons per square mile (1,540 per sq. km.), as compared to about 200 persons per sq. mi. For the country as a whole.

Small communities spread throughout the desert regions of Egypt are clustered around oases and historic trade and transportation routes. The government has tried with mixed success to encourage migration to newly irrigated land reclaimed from the desert. However, the proportion of the population living in rural areas has continued to decrease as people move to the cities in search of employment and a higher standard of living.

The Egyptians are a fairly homogeneous people of Hamitic origin. Mediterranean and Arab influences appear in the north, and there is some mixing in the south with the Nubians of northern Sudan. Ethnic minorities include a small number of Bedouin Arab nomads in the eastern and western deserts and in the Sinai, as well as some 50,000-100,000 Nubians clustered along the Nile in Upper (southern) Egypt.

The literacy rate is about 71.4% of the adult population. Education is free through university and compulsory from ages 6 through 15. Rates of primary and secondary education have strengthened in recent years. 93% of children enter primary school today, compared with 87% in 1994. Major universities include Cairo University (100,000 students), Alexandria University, and the 1,000-year-old Al-Azhar University, one of the world’s major centers of Islamic learning.

Egypt’s vast and rich literature constitutes an important cultural element in the life of the country and in the Arab world as a whole. Egyptian novelists and poets were among the first to experiment with modern styles of Arabic literature, and the forms they developed have been widely imitated. Egyptian novelist Naguib Mahfouz was the first Arab to win the Nobel prize for literature. Egyptian books and films are available throughout the Middle East.

Egypt has endured as a unified state for more than 5,000 years, and archeological evidence indicates that a developed Egyptian society has existed for much longer. Egyptians take pride in their « pharaonic heritage » and in their descent from what they consider mankind’s earliest civilization. The Arabic word for Egypt is Misr, which originally connoted « civilization » or « metropolis. »

Archeological findings show that primitive tribes lived along the Nile long before the dynastic history of the pharaohs began. By 6000 B.C., organized agriculture had appeared.

In about 3100 B.C., Egypt was united under a ruler known as Mena, or Menes, who inaugurated the 30 pharaonic dynasties into which Egypt’s ancient history is divided—the Old and the Middle Kingdoms and the New Empire. The pyramids at Giza (near Cairo), which were built in the fourth dynasty, testify to the power of the pharaonic religion and state. The Great Pyramid, the tomb of Pharaoh Khufu (also known as Cheops), is the only surviving monument of the Seven Wonders of the Ancient World. Ancient Egypt reached the peak of its power, wealth, and territorial extent in the period called the New Empire (1567-1085 B.C.).

Persian, Greek, Roman, and Arab ConquerorsIn 525 B.C., Cambyses, the son of Cyrus the Great, led a Persian invasion force that dethroned the last pharaoh of the 26th dynasty. The country remained a Persian province until conquered by Alexander the Great in 322 B.C., ushering in Ptolemaic rule in Egypt that lasted for nearly 300 years.

Following a brief Persian reconquest, Egypt was invaded and conquered by Arab forces in 642 A.D. A process of Arabization and Islamization ensued. Although a Coptic Christian minority remained—and constitutes about 10% of the population today—the Arab language inexorably supplanted the indigenous Coptic tongue. For the next 1,300 years, a succession of Arab, Mameluke, and Ottoman caliphs, beys, and sultans ruled the country.

European InfluenceThe Ottoman Turks controlled Egypt from 1517 until 1882, except for a brief period of French rule under Napoleon Bonaparte. In 1805, Mohammed Ali, commander of an Albanian contingent of Ottoman troops, won autonomy from the Ottoman Empire and foundedthe dynasty that ruled Egypt until his great-great grandson, Farouk , was overthrown in 1952. Mohammed Ali ruled Egypt until 1848, ushering in the modern history of Egypt. The rapid growth of Cairo as an urban center began in the reign of Ismail (1863-79). Eager to modernize the capital, he ordered the construction of a European-style city to the west of the medieval core. The Suez Canal was completed in Ismail’s reign in 1869, and its completion was celebrated by many events, including the commissioning of Verdi’s « Aida » for a new opera house and the building of great palaces, such as the Omar Khayyam (originally constructed to entertain the French Empress Eugenie, and now the central section of the Cairo Marriott Hotel).

In 1882, British expeditionary forces crushed an Egyptian revolt led by Ahmed Orabi Pasha, marking the beginning of British occupation and the virtual inclusion of Egypt within the British Empire. Egypt became independent from the British Empire in 1922. British influence, however, continued to dominate Egypt’s political life.

Between 1922 and 1952, three main political forces competed with one another : the Wafd, a broadly-based nationalist political organization strongly opposed to British influence ; King Fuad, whom the British had installed during World War I ; and the British themselves, who were determined to maintain control over the Suez Canal. Other political forces emerging in this period included the Communist Party (1925) and the Muslim Brotherhood (1928), which eventually became a potent political and religious force.

During World War II, British troops used Egypt as a base for Allied operations throughout the region. British troops were withdrawn to the Suez Canal area in 1947, but nationalist, anti-British feelings continued to grow after the war. On July 22-23, 1952, a group of disaffected army officers (the « Free Officers ») led by Lt. Col. Gamal Abdel Nasser overthrew King Farouk, whom the military blamed for Egypt’s poor performance in the 1948 war with Israel. Following a brief experiment with civilian rule, they abrogated the 1923 constitution and declared Egypt a republic on June 19, 1953. Nasser evolved into a charismatic leader, not only of Egypt, but of the Arab world, promoting and implementing « Arab socialism. » He nationalized much of Egypt’s economy.

Nasser helped establish the Non-Aligned Movement of developing countries in September 1961, and continued to be a leading force in the movement until his death in 1970. When the United States held up military sales in reaction to Egyptian neutrality toward Moscow, Nasser concluded a seminal arms deal with Czechoslovakia in September 1955.

When the U.S. and the World Bank withdrew their offer to help finance the Aswan High Dam in mid-1956, Nasser nationalized the privately owned Suez Canal Company. The crisis that followed, exacerbated by growing tensions with Israel over guerrilla attacks from Gaza and Israeli reprisals, resulted in the invasion of Egypt that October by France, Britain, and Israel ; U.S. political intervention helped reverse the invasion, and the Canal remained nationalized.

Nasser’s domestic policies were frequently oppressive, yet generally popular. All opposition was stamped out, and opponents of the regime frequently were imprisoned without trial. Nasser’s foreign and military policies helped provoke the Israeli attack of June 1967 that virtually destroyed Egypt’s armed forces along with those of Jordan and Syria. Israel also occupied the Sinai Peninsula, the Gaza Strip, the West Bank, and the Golan Heights. Nasser, however, was revered by the masses in Egypt and elsewhere in the Arab world until his death in 1970.

After Nasser’s death, another of the original « Free Officers, » Vice President Anwar el-Sadat, was elected President. In 1971, Sadat concluded a treaty of friendship with the Soviet Union, but a year later, ordered Soviet advisers to leave. In 1973, he launched the October war with Israel, in which Egypt’s armed forces achieved initial successes but were driven back by Israeli counterattacks.

Camp David and the Peace ProcessIn a momentous change from the Nasser era, President Sadat shifted Egypt from a policy of confrontation with Israel to one of peaceful accommodation through negotiations. Following the Sinai Disengagement Agreements of 1974 and 1975, Sadat created a fresh opening for progress by his dramatic visit to Jerusalem in November 1977. This led to President Jimmy Carter’s invitation to President Sadat and Prime Minister Begin to join him in trilateral negotiations at Camp David.

The historic Camp David accords were signed by Egypt and Israel and witnessed by the United States on September 17, 1978. The accords led to the March 26, 1979 signing of the Egypt-Israel Treaty of Peace, by which Egypt regained control of the Sinai in May 1982. Throughout this period, U.S.-Egyptian relations steadily improved, but Sadat’s willingness to break ranks by making peace with Israel antagonized most other Arab states.

Domestic Politics after Camp DavidSadat introduced greater political freedom and a new economic policy, the most important aspect of which was the “infitah” or « open door. » This relaxed government controls over the economy and encouraged private, including foreign, investment. Sadat dismantled much of the existing political machine and brought to trial a number of former government officials accused of criminal excesses during the Nasser era.

On October 6, 1981, Islamic extremists assassinated President Sadat. Hosni Mubarak, Vice President since 1975 and an air force commander during the October 1973 war, was elected President later that month. He was subsequently confirmed by popular referendum for four more 6-year terms ; the most recent referendum took place in September 2005. Egypt was readmitted to the Arab League in 1989 after being expelled for reaching a peace agreement with Israel.

Between 1991 and 2011, Egypt undertook a domestic economic reform program to reduce the size of the public sector and expand the role of the private sector. Political reform stalled, however. The government repressed civil society and opposition groups and maintained Egypt’s longstanding state of emergency. The [LSK1] first competitive presidential elections, held in 2005, were marked by low voter turnout and charges of fraud. Parliamentary elections in 2005 saw significant opposition gains but also violence, low turnout, fraud, and vote rigging. In one notable case, Ayman Nour, member of parliament and popular leader of the opposition Al-Ghad (Tomorrow) Party, was arrested in 2005 and ultimately sentenced to five years’ imprisonment. He was released in 2009. Following parliamentary elections in 2010 that saw significant irregularities and pre-election restrictions, the ruling National Democratic Party (NDP) continued to dominate national politics by maintaining an overriding majority in the People’s Assembly and Shura Council.

The Arab Spring in Egypt : Revolution at Tahrir Square

After an 18-day massive, popular revolution centered on Cairo’s Tahrir (Liberation) Square, Hosni Mubarak was forced to resign as the President of Egypt on February 11, 2011. He relinquished the administration of power first to his Vice President and then to a transitional government led by the Egyptian military’s Supreme Council of the Armed Forces (SCAF), which then appointed a civilian prime minister and cabinet to run the Egyptian government.

In a March 19, 2011 referendum, Egyptians voted overwhelmingly to amend Egypt’s constitution, thus setting the legal groundwork for democratic parliamentary and presidential elections. The referendum included amendments that set term limits for the president, affirmed judicial oversight of elections, and prevented the state of emergency from remaining in effect for longer than six months unless approved by a public referendum. It also provided for the establishment of a 100-member constituent assembly to draft a new constitution. In November 2011, Egyptians began voting in elections for Egypt’s People’s Assembly.

GOVERNMENT AND POLITICAL CONDITIONSEgypt’s March 19, 2011 public referendum produced a temporary constitutional framework that empowers the SCAF to govern Egypt in the interim, with the goal of transferring power to a civilian government and drafting a new constitution in 2012.

Egypt’s parliament is made up of a 508-seat People’s Assembly (498 elected) and a 270-seat Shura Council (180 elected). Egyptians now vote in a mixed parallel proportional representation (PR) and individual candidate (IC) system, where two thirds of the parliament is elected by PR party lists and one third is elected by IC districts.

Egypt’s judicial system is similar to European (primarily French) legal concepts and methods. The courts have demonstrated increasing independence, and the principles of due process and judicial review have gained greater respect since the January 25 Revolution. Egypt’s legal code is derived largely from the Napoleonic Code. Marriage and personal status (family law) are primarily based on the religious law of the individual concerned, which for most Egyptians is Islamic Law (Sharia).

Principal Government OfficialsPresidential authority is currently held by Field Marshal Mohamed Hussein Tantawi, Chairman of the Supreme Council of the Armed ForcesPrime Minister—Kamal El GanzouriMinister of Foreign Affairs—Mohamed Kamel AmrAmbassador to the United States—Sameh ShoukryPermanent Representative to the United Nations—Maged Abdel Fattah Abdelaziz

NATIONAL SECURITYEgypt’s armed forces, among the largest in the region, include the army, air defense, air force, and navy. The armed forces inventory includes equipment from the United States, France, Italy, the United Kingdom, the former Soviet Union, and China. Equipment from the former Soviet Union is being progressively replaced by more modern American, French, and British equipment, a significant portion of which is built under license in Egypt. To bolster stability and moderation in the region, Egypt has provided military assistance and training to a number of African and Arab states. Egypt remains a strong military and strategic partner of the United States.

ECONOMYWith the installation of the 2004 Egyptian cabinet and the 2005 presidential election, the Government of Egypt began a new reform movement, following a stalled economic reform program begun in 1991, but moribund since the mid-1990s. Since 2004, the cabinet economic team has simplified and reduced tariffs and taxes, improved the transparency of the national budget, revived stalled privatizations of public enterprises and implemented economic legislation designed to foster private sector-driven economic growth and improve Egypt’s competitiveness. The Egyptian economy experienced steady GDP growth rates around 7% between 2005 and 2008, before dropping below 5% during the global economic crisis. The economy is still hampered by government intervention, substantial subsidies for food, housing, and energy, and bloated public sector payrolls. Limited energy subsidy reform began in 2007 but has stalled since the 2008 global economic crisis. Agriculture is mainly in private hands, and has been largely deregulated, with the exception of cotton, sugar, and rice production. Construction, non-financial services, and domestic marketing are also largely private. The Egyptian economy, however, relies heavily on tourism, oil and gas exports, and Suez Canal revenues, much of which is controlled by the public sector and is also vulnerable to outside factors. The tourism sector suffered tremendously following a terrorist attack in Luxor in October 1997. As a result of the global economic crisis, annual revenues for the Suez Canal fell sharply in 2008 and began only a partial recovery in 2009. The drop in Canal traffic and revenues has been partially offset by high international oil prices, as the shorter Suez route cuts costs for some shippers.

The World Bank ranked Egypt 94 out of 183 economies in its 2011 Doing Business report ; among Arab countries it is likewise in the middle— eight out of 20. Egypt has made many improvements to its business and regulatory environment since 2004, when the most recent round of liberalizing reforms began, but there is still a lot of room for improvement.

Egypt’s tourism industry, which is $10 billion per year (approximately 6% of GDP), suffered a major blow as a result of the Arab Spring revolution in January and February 2011, and its slow recovery is highly vulnerable to perceptions about Egypt’s internal political stability and security. Egypt’s economy contracted seven percent between January and March 2011. High inflation, low consumer confidence, and labor unrest are among the challenges facing Egypt’s current transitional government. Subsequent labor strikes, factory closures, and disruptions in the stock market greatly contributed to the increase in debt and inflation.

The proliferation of independent labor unions in Egypt has been one of the significant results of Egypt’s democratic revolution in January and February 2011. Between March 11 and June 1, the Egyptian government registered 26 new independent unions as part of its declared commitment to freedom of association in the new Egypt.

For nearly three decades, the United States has worked with Egyptians to support their economy and quality of life through programs focused on economic development and good governance. The U.S. Agency for International Development (USAID)’s programs have used benchmarks that aim to stimulate the small and microenterprise sectors, improve budget transparency to increase macroeconomic stability, and improve the trade regime and business climate. USAID’s economic support program provides up to $100 million to support job creation, humanitarian assistance, and poverty alleviation for those negatively affected by the recent economic downturn. To support the Middle East peace process through regional economic integration, the United States also permits products to be imported from Egypt without tariffs if they have been produced by factories registered in Qualified Industrial Zones and 10.5% of the inputs of these products originate from Israel.

AgricultureApproximately one-third of Egyptian men dit engaged directly in farming, and many others work in the processing or trading of agricultural products. Nearly all of Egypt’s agricultural production takes place in some 2.5 million hectares (6 million acres) of fertile soil in the Nile Valley and Delta. Some desert lands are being developed for agriculture, including the ambitious Toshka project in Upper Egypt, but some other fertile lands in the Nile Valley and Delta are being lost to urbanization and erosion.

Warm weather and plentiful water permit several crops a year. Further improvement is possible, but land is worked intensively and yields are high. Cotton, rice, wheat, corn, sugarcane, sugar beets, onions, and beans are the principal crops. Increasingly, a few modern operations are producing fruits, vegetables and flowers, in addition to cotton, for export. While the desert hosts some large, modern farms, more common traditional farms occupy one acre each, typically in a canal-irrigated area along the banks of the Nile. Many small farmers also have cows, water buffaloes, and chickens, although larger modern farms are becoming more important.

The United States is a major supplier of wheat, corn, and soybean products to Egypt, almost all through commercial sales. Egypt is one of the U.S.’s largest markets for wheat sales. U.S. agricultural sales to Egypt average $2 billion annually. U.S. food assistance programs to Egypt ended in 1992 as Egypt became more prosperous. Egypt continues to receive modest food assistance through the World Food Program and from France.

« Egypt, » wrote the Greek historian Herodotus 25 centuries ago, « is the gift of the Nile. » The land’s seemingly inexhaustible resources of water and soil carried by this mighty river created in the Nile Valley and Delta the world’s most extensive oasis. Without the Nile, Egypt would be little more than a desert wasteland.

The river carves a narrow, cultivated floodplain, never more than 20 kilometers wide, as it travels northward toward Cairo from Lake Nasser on the Sudanese border, behind the Aswan High Dam. Just north of Cairo, the Nile spreads out over what was once a broad estuary that has been filled by river deposits to form a fertile delta about 250 kilometers wide (150 mi.) at the seaward base and about 160 kilometers (96 mi.) from south to north.

Before the construction of dams on the Nile, particularly the Aswan High Dam (started in 1952, completed in 1970), the fertility of the Nile Valley was sustained by the water flow and the silt deposited by the annual flood. Sediment is now obstructed by the Aswan High Dam and retained in Lake Nasser. The interruption of yearly, natural fertilization and the increasing salinity of the soil has been a manageable problem resulting from the dam. The benefits remain impressive : more intensive farming on millions of acres of land made possible by improved irrigation, prevention of flood damage, and the generation of billions of low-cost kilowatt hours of electricity.

Due to climate change and rising sea levels, the lower delta faces issues with soil salinity. Waters from the Mediterranean infiltrate the soil, spoiling hundreds of acres of previously lush farm lands. Though the men dit is gradual and Egypt has time to adapt, the population cannot afford losing more farm land seeing how thousands of acres have already been swallowed up by urban sprawl. Farmers in affected areas have to pump in more fresh water and purchase expensive sand and fertilizer to save their lands, which leads many to abandon the land and become climate refugees.

The Western Desert accounts for about two-thirds of the country’s land area. For the most part, it is a massive sandy plateau marked by seven major depressions. One of these, Fayoum, was connected about 3,600 years ago to the Nile by canals. Today, it is an important irrigated agricultural area.

Natural ResourcesIn addition to the agricultural capacity of the Nile Valley and Delta, Egypt’s natural resources include petroleum, natural gas, phosphates, and iron ore. Crude oil is found primarily in the Gulf of Suez and in the Western Desert. Natural gas is found mainly in the Nile Delta, off the Mediterranean seashore, and in the Western Desert. Oil and gas accounts for approximately 12% of GDP. Export of petroleum and related products (including bunker and aviation sales) amounted to approximately $11.4 billion in fiscal year 2008-2009.

Crude oil production has been in decline for over a decade, from a high of more than 920,000 barrels per day (BPD) in 1995 to less than 550,000 BPD as of October 2009. To minimize the growing domestic demand for oil-based products, estimated in July 2009 at more than 31 million metric tons per year, Egypt is encouraging the production of natural gas. Production of natural gas doubled from 21 million metric tons in mid-2003 to 43 million metric tons in July 2008. In FY 2008-2009, natural gas production amounted to 6.4 billion cubic feet (BCF) per day. In March 2009 the Egyptian Gas Holding Company announced plans for 23 new exploration wells with total investments of $1.1 billion during fiscal year 2009-2010.

As of July 2009, crude oil and condensates reserves were estimated at 4.4 billion barrels, and proven natural gas reserves were estimated at 77 trillion cubic feet (TCF) with possible additional reserves totaling another 40-50 TCF. However, independent oil and gas experts indicated that Egypt’s proven natural gas reserves may be as high as 70 TCF, of which more than 80% (i.e., 57 TCF) is from the cone of the Nile Delta. Texas-based Apache Oil Company is the largest American investor in Egypt, with a total investment of more than $7 billion since 1995.

The Ministry of Petroleum regards expansion of the Egyptian petrochemical industry and increased exports of natural gas as significant strategic objectives. Three liquefied natural gas (LNG) trains are operating in Egypt. The first is in Damietta on the eastern side of the Nile Delta and is operated by the Spanish electric utility Union Fenosa ; the second is a project located at Idku in the western Delta, with British Gas (BG) Group and the Malaysian state oil company Petronas as the major investors ; and the third, the Mediterranean Gas Complex in Port Said, utilizes gas for export and domestic consumption, with the Italian company AGIP and BP as the main shareholders.

Egypt and Jordan established the Eastern Gas Company to export natural gas to Jordan, and then later to Syria and Lebanon. In summer 2003 Egypt completed the first phase of the project by exporting gas to Jordan via a new pipeline from El Arish on Egypt’s north Sinai cost to Taba on the Gulf of Aqaba, and then underwater to the Jordanian city of Aqaba. The second phase was completed in 2005, connecting the pipeline to the Jordanian town of Rihab, north of the capital Amman. While by 2008 gas exports grew to 12.6 million metric tons of oil equivalent, the Government of Egypt may have to import natural gas within 3 to 4 years in order to meet domestic demand, particularly for producing electricity. In the wake of higher world market gas prices, the Government of Egypt in 2009 succeeded in renegotiating upward the price received under existing long-term gas export contracts with purchasers in Europe, Jordan, and Israel. The pipeline that carries gas through Egypt to Israel and Jordan was attacked on at least 10 separate occasions in 2011, resulting in the frequent disruption of supplies.

Transport and CommunicationTransportation facilities in Egypt are centered in Cairo and largely follow the pattern of settlement along the Nile. The main line of the nation’s 5,500-kilometer (3,400-mi.) railway network runs from Alexandria to Aswan and the Suez Canal. The well-maintained road network has expanded rapidly to over 47,500 kilometers (29,515 mi.), covering the Nile Valley and Delta, Mediterranean and Red Sea coasts, the Sinai, and the Western oases.

Egypt Air provides reliable domestic air service to major tourist destinations from its Cairo hub, in addition to overseas routes. As a recently-joined member of the Star Alliance, government-owned Egypt Air is expanding its air fleet and its international routes, in keeping with the Government of Egypt’s overall vision of Egypt as a growing and increasingly key regional transportation hub. The Nile River system (about 1,000 km. Or 620 mi.) and the principal canals (1,600 km. Almost 1,000 mi.) are important locally for transportation. The Suez Canal is a major waterway for global and regional commerce and navigation, linking the Mediterranean and Red Seas. Major ports are Alexandria, Port Said, the East Port Said container terminal and Damietta on the Mediterranean, and Ain El Sukhna, Suez and Safraga on the Red Sea, with major infrastructure and capacity modernizations and upgrades ongoing since 2008 in most of these ports.

Egypt has long been the cultural and informational center of the Arab world, and Cairo is the region’s largest publishing and broadcasting center. There are tens of daily newspapers with a total circulation of more than 4 million, and a number of monthly newspapers, magazines, and journals. Daily and weekly newspapers are a mix of independent, political party, and pro-government publications, and these papers conduct a lively, often highly partisan, debate on public issues. Recently, online publications have been on the rise, along with the online versions of major independent publications. Egyptian Radio and Television Union (ERTU) is the state-run entity that controls Egyptian TV (ETV), Nile TV, and Nile News, as well as the specialized channels (7 channels, including sports, culture, comedy, and children’s programming) and most radio frequencies in Egypt. ETV controls terrestrial (free-to-air) broadcasts throughout Egypt, broadcasting Channel 1 and Channel 2 nationwide, as well as six regional channels and depends heavily on commercial revenue. ETV sells its specially produced programs and soap operas to the entire Arab world. In addition to Egyptian programming, Al Arabia, Al Jazeera, the Middle East Broadcast Company, a Saudi television station transmitting from London (MBC), Lebanese networks (Future and LBC), Arab Radio and Television (ART), and other Gulf stations as well as Western networks such as CNN, BBC, Fox News, and Al Hurra provide access to more international programs to Egyptians who own satellite receivers. NileSat, one of the three main providers of satellite TV to the region, is effectively controlled by ERTU and hosts a wide variety of channels.

Beginning in 2001, private satellite TV and radio has entered the Egyptian media marketplace. Three new private satellite-based TV stations were launched in November 2001, marking a significant change in Egyptian government policy. Dream TV 1 and 2 produce talk shows, cultural programming, broadcast contemporary video clips and films featuring Arab and international actors, as well as soap operas ; another private station, El-Mehwar, focuses on business and general news. Other new independent TV stations include Al Hayat TV, O TV and ONTV (owned by the Orascom conglomerate), El Saa and Modern TV. These private channels also transmit on NileSat. Recently, there has been a proliferation of religious themed channels catering to Salafis (ultra-conservative Muslims).

Radio in Egypt is almost all government-controlled and uses 44 short-wave frequencies, 18 medium-wave stations, and four FM stations. There are seven regional radio stations covering the country. Egyptian Radio transmits 60 hours daily overseas in 33 languages and three hundred hours daily within Egypt. In 2000, Radio Cairo introduced new specialized (thematic) channels on its FM station. These stations, known as Radio El Nile, include news and music.

Both traditional journalists and bloggers played critical roles reporting on the events of the January 2011 Revolution. Activists also organized heavily through social media tools such as Facebook and Twitter. In the revolution’s early days, the government blocked access to social networking websites, followed by a near complete shutdown of Internet and cell phone access across the country for several days, before it was finally restored.

FOREIGN RELATIONSGeography, population, history, military strength, and diplomatic expertise give Egypt extensive political influence in the Middle East and within the Non-Aligned Movement as a whole. Cairo has been a crossroads of Arab commerce and culture for millennia, and its intellectual and Islamic institutions are at the center of the region’s social and cultural development.

The Arab League headquarters is in Cairo, and the Secretary General of the League is traditionally an Egyptian. Former Egyptian Foreign Minister Nabil al-Araby is the present Secretary General of the Arab League. Former Egyptian Deputy Prime Minister Boutros Boutros-Ghali served as Secretary General of the United Nations from 1991 to 1996.

Egypt is a key partner in the search for peace in the Middle East and resolution of the Israeli-Palestinian conflict. Sadat’s groundbreaking trip to Israel in 1977, the 1978 Camp David Accords, and the 1979 Egypt-Israel Peace Treaty represented a fundamental shift in the politics of the region—from a strategy of confrontation to one of peace as a strategic choice. Egypt was subsequently ostracized by other Arab states and ejected from the Arab League from 1979 to 1989. Egypt played an important role in the negotiations leading to the Madrid Peace Conference in 1991, which, under U.S. and Russian sponsorship, brought together all parties in the region to discuss Middle East peace. In 1996, then-President Mubarak hosted the Sharm El-Sheikh « Summit of the Peacemakers » attended by President Bill Clinton and other world leaders. In 2000, he hosted two summits at Sharm El-Sheikh and one at Taba in an effort to resume the Camp David negotiations suspended in July of 2000, and in June 2003, Mubarak hosted President George W. Bush for another summit on the Middle East peace process. Throughout mid-2004, Egypt worked closely with Israel and the Palestinian Authority to facilitate stability following Israel’s withdrawal from Gaza, which occurred in August and September of 2005. Prior to this, Egypt and Israel reached an agreement that allowed Egypt to deploy additional forces along the Philadelphi Corridor in an attempt to control the border and prevent the smuggling of weapons.

Egypt played a key role during the 1990-91 Gulf crisis. Egypt helped assemble the international coalition and deployed 35,000 Egyptian troops against Iraq to liberate Kuwait. The Egyptian contingent was the third-largest in the coalition forces, after the U.S. and U.K. In the aftermath of the Gulf war, Egypt signed the Damascus declaration with Syria and the Gulf states to strengthen Gulf security. Egypt continues to contribute regularly to UN peacekeeping missions, most recently in East Timor, Sierra Leone, and Liberia. In August 2004, Egypt was actively engaged in seeking a solution to the crisis in the Darfur region of Sudan, including the dispatch of military monitors. Following the September 11, 2001 terrorist attacks on the United States, Egypt, which has itself been the target of terrorist attacks, has been a key supporter of U.S. efforts against terrorists and terrorist organizations.

U.S.-EGYPTIAN RELATIONSThe United States and Egypt enjoy a strong and friendly relationship based on shared mutual interest in Middle East peace and stability, revitalizing the Egyptian economy and strengthening trade relations, and promoting regional security. Over the years, Egypt and the United States have worked together to expand Middle East peace negotiations, hosting talks, negotiations, and the Middle East and North Africa Economic (MENA) Conference. Multinational exercises, U.S. assistance to Egypt’s military modernization program, and Egypt’s role as a contributor to various UN peacekeeping operations continually reinforce the U.S.-Egyptian military relationship.

An important pillar of the bilateral relationship remains U.S. security and economic assistance to Egypt, which expanded significantly in the wake of the Egyptian-Israeli Peace Treaty in 1979. U.S. military aid to Egypt totals over $1.3 billion annually. In addition, the U.S. Agency for International Development (USAID) has provided over $28 billion in economic and development assistance to Egypt since 1975. Early assistance focused on infrastructure, health, food supply, and agriculture. The Commodity Import Program, through which USAID provided hundreds of millions of dollars in financing to enable the Egyptian private sector to import U.S. goods between 1986 and 2008, was one of the largest and most popular USAID programs. Current programs focus on trade and investment ; utilities ; education ; healthier, planned families ; natural resources ; democracy and governance ; and other programs supported by the Middle East Partnership Initiative (MEPI).

U.S. military cooperation has helped Egypt modernize its armed forces and strengthen regional security and stability. Under Foreign Military Financing (FMF) programs, the United States has provided F-4 jet aircraft, F-16 jet fighters, M-60A3 and M1A1 tanks, armored personnel carriers, Apache helicopters, antiaircraft missile batteries, aerial surveillance aircraft, and other equipment. The United States and Egypt also participate in combined military exercises, including deployments of U.S. troops to Egypt. Every other year, Egypt hosts Operation Bright Star, a multilateral military exercise with the U.S., and the largest military exercise in the region. Units of the U.S. 6th Fleet are regular visitors to Egyptian ports.

GeographyArea : About 309,500 sq. km. (approximately the size of the State of New Mexico). It is bordered on the north by the United Arab Emirates (U.A.E.), on the northwest by Saudi Arabia, and on the southwest by the Republic of Yemen. The Omani coastline stretches 3,165 km.Cities : Capital—Muscat. Other cities—Salalah, Nizwa, Sohar, Sur.Terrain : Mountains, plains, and arid plateau.Climate : Hot and humid along the coast ; hot and dry in the interior ; summer monsoon in the far south.

PEOPLEAbout 55% of the population lives in Muscat and the Batinah coastal plain northwest of the capital ; about 215,000 live in the Dhofar (southern) region, and about 30,000 live in the remote Musandam Peninsula on the Strait of Hormuz. Some 815,000 non-nationals live in Oman, most of whom are guest workers from South Asia, Egypt, Jordan, and the Philippines.

Since 1970, the government has given high priority to education in order to develop a domestic work force, which the government considers a vital factor in the country’s economic and social progress. In 1986, Oman’s first university, Sultan Qaboos University, opened. It has continued to expand, recently adding a law college, and remains the country’s only major public university. In total, there are about 25 public post-secondary education institutions in Oman, including technical colleges, teacher training colleges, and health institutes.

There are three private universities and 20 private post-secondary education institutions in Oman, including a banking college, a fire and safety college, a dentistry college, and business and management colleges. Most of these public and private post-secondary education institutions offer 4-year degrees, while the remainder provide 2-year post-secondary diplomas. Since 1999, the government has embarked on reforms in higher education designed to meet the needs of a growing population. Approximately 40% of Omani high school graduates pursue some type of post-secondary education.

In July 2011 the Government of Oman announced 500 new scholarships annually for study in the United States, as part of an overall program of 1,500 scholarships for the year for Omani students going overseas. These scholarships are guaranteed for the length of undergraduate study, including up to a year and a half of intensive English language study prior to entering a degree program. The government also recently announced a new graduate scholarship program to award 1,000 scholarships over the following 5 years for study in the U.S., Canada, U.K., Australia, Germany, Japan, and Singapore.

HISTORYOman adopted Islam in the seventh century A.D., during the lifetime of the Prophet Muhammad. Ibadhism, a form of Islam distinct from Shiaism and the « Orthodox » schools of Sunnism, became the dominant religious sect in Oman by the eighth century A.D. Oman is the only country in the Islamic world with a majority Ibadhi population. Ibadhism is known for its « moderate conservatism. » One distinguishing feature of Ibadhism is the choice of ruler by communal consensus and consent.

Contact with Europe was established in 1508, when the Portuguese conquered parts of Oman’s coastal region. France’s influence predominated for more than a century. Fortifications built during the Portuguese occupation can still be seen at Muscat.

Except for a period when Persia conquered parts of Oman, Oman has been an independent nation. After the Portuguese were expelled in 1650 and while resisting Persian attempts to establish hegemony, the Sultan of Oman extended his conquests to Zanzibar, other parts of the eastern coast of Africa, and portions of the southern Arabian Peninsula. During this period, political leadership shifted from the Ibadhi imams, who were elected religious leaders, to hereditary sultans who established their capital in Muscat. The Muscat rulers established trading posts on the Persian coast and also exercised a measure of control over the Makran coast (now Pakistan). By the early 19th century, Oman was the most powerful state in Arabia and had a major presence on the East African coast.

Oman was the object of Franco-British rivalry throughout the 18th century. During the 19th century, Oman and the United Kingdom concluded several treaties of friendship and commerce. In 1908, the British entered into an agreement of friendship. Their traditional association was confirmed in 1951 through a new treaty of friendship, commerce, and navigation by which the United Kingdom recognized the Sultanate of Oman as a fully independent state.

When Sultan Sa’id bin Sultan Al-Busaid died in 1856, his sons quarreled over his succession. As a result of this struggle, the Omani empire—through the mediation of the British Government under the « Canning Award »—was divided in 1861 into two separate principalities—Zanzibar, with its East African dependencies, and Muscat and Oman. Zanzibar paid an annual subsidy to Muscat and Oman until its independence in early 1964.

During the late 19th and early to mid-20th centuries, the sultan in Muscat faced a rebellion by members of the Ibadhi sect residing in the interior of Oman, centered around the town of Nizwa, who wanted to be ruled exclusively by their religious leader, the Imam of Oman. This conflict was resolved temporarily by the Treaty of Seeb in 1920, which granted the imam autonomous rule in the interior, while recognizing the sovereignty of the sultan elsewhere.

Following the discovery of oil in the interior, the conflict flared up again in 1954, when the new imam led a sporadic 5-year rebellion against the sultan’s efforts to extend government control into the interior. The insurgents were defeated in 1959 with British help. The sultan then terminated the Treaty of Seeb and eliminated the office of the imam. In the early 1960s, the imam, exiled to Saudi Arabia, obtained support from his hosts and other Arab governments, but this support ended in the 1980s.

In 1964, a separatist revolt began in Dhofar Province. Aided by communist and leftist governments such as the former South Yemen (People’s Democratic Republic of Yemen), the rebels formed the Dhofar Liberation Front, which later merged with the Marxist-dominated Popular Front for the Liberation of Oman and the Arab Gulf (PFLOAG). The PFLOAG’s declared intention was to overthrow all traditional Arab Gulf regimes. In mid-1974, PFLOAG shortened its name to the Popular Front for the Liberation of Oman (PFLO) and embarked on a political rather than a military approach to gain power in the other Gulf states, while continuing the guerrilla war in Dhofar.

With the help of British advisors, Sultan Qaboos bin Sa’id assumed power on July 23, 1970, in a palace coup directed against his father, Sa’id bin Taymur, who later died in exile in London. The new sultan was confronted with insurgency in a country plagued by endemic disease, illiteracy, and poverty. One of the new sultan’s first measures was to abolish many of his father’s harsh restrictions, which had caused thousands of Omanis to leave the country, and to offer amnesty to opponents of the previous regime, many of whom returned to Oman. He also established a modern government structure and launched a major development program to upgrade educational and health facilities, build a modern infrastructure, and develop the country’s natural resources.

In an effort to end the Dhofar insurgency, Sultan Qaboos expanded and re-equipped the armed forces and granted amnesty to all surrendered rebels while vigorously prosecuting the war in Dhofar. He obtained direct military support from the U.K., Iran, and Jordan. By early 1975, the guerrillas were confined to a 50-square kilometer (20-sq. mi.) area near the Yemen border and shortly thereafter were defeated. As the war drew to a close, civil action programs were given priority throughout Dhofar and helped win the allegiance of the people. The PFLO threat diminished further with the establishment of diplomatic relations in October 1983 between South Yemen and Oman, and South Yemen subsequently lessened propaganda and subversive activities against Oman. In late 1987, Oman opened an embassy in Aden, South Yemen, and men ditsits first resident ambassador to the country.

The northern tip of Oman, called the Musandam Peninsula, is strategically located on the Strait of Hormuz, the entrance to the Gulf, 35 miles directly opposite Iran. Oman is concerned with regional stability and security, given tensions in the region, the proximity of Iran and Iraq, and the potential threat of political Islam. Oman maintained its diplomatic relations with Iraq throughout the 1990-91 Gulf war while supporting the UN allies by sending a contingent of troops to join coalition forces and by opening up to prepositioning of weapons and supplies. In addition, since 1980 Oman and the U.S. have been parties to a military cooperation agreement, which was revised and renewed in 2010. Oman also has long been an active participant in efforts to achieve Middle East peace.

Following the terrorist attacks on the United States in September 2001, the Omani Government at all levels pledged and provided impressive support to the U.S.-led coalition against terrorism. Oman is a signatory of most UN-sponsored anti-terrorism treaties.

GOVERNMENT AND POLITICAL CONDITIONSSultan Qaboos bin Sa’id rules with the aid of his ministers. His dynasty, the Al Sa’id, was founded about 250 years ago by Imam Ahmed bin Sa’id Al Bu Said. Sultan Qaboos is a direct descendant of the 19th-century ruler, Sa’id bin Sultan, who first opened relations with the United States in 1833. Since his accession in 1970, Sultan Qaboos has balanced tribal, regional, and ethnic interests in composing the national administration. The Council of Ministers, which functions as a cabinet, consists of 31 ministers (but only 29 ministries), all directly appointed by Qaboos. The Sultanate does not have political parties, and new powers that were granted to the bicameral representative bodies in 2011, which allow proposing and amending legislation, do not provide for a fully independent legislature.

In November 1991, Sultan Qaboos established the Majlis al-Shura (Consultative Council), which replaced the 10-year-old State Consultative Council, in an effort to systematize and broaden public participation in government. Representatives were chosen in the following manner : Local caucuses in each of the 59 districts sent forward the names of three nominees, whose credentials were reviewed by a cabinet committee. These names were then forwarded to the Sultan, who made the final selection. Since then, reforms have permitted Omanis to freely run for office in contested elections featuring universal adult suffrage.

The elected Consultative Council serves as a conduit of information between the people and the government ministries. The Oman Council, of which the Consultative Council comprises one half, can approve or suggest amendments to legislation, propose legislation, convoke service ministers, recommend policy, and conduct studies on public policy. It has no authority in the areas of foreign affairs, defense, security, and finance. In early 2003, Sultan Qaboos declared universal suffrage for the October 2003 Majlis al-Shura elections. Two women were elected to sit with 82 male colleagues in those elections, which were observed to be free and fair. Roughly 194,000 Omani men and women, or 74% of registered voters, participated in the elections. Elections were held again in 2007 and 2011.

The appointed Majlis al-Dawla (State Council) acts as the upper chamber in Oman’s bicameral representative body. As of 2011, Sultan Qaboos had expanded the Majlis al-Dawla to 83 members from 53.

In November 1996, Sultan Qaboos presented his people with the « Basic Statute of the State, » Oman’s first written « constitution. » It guarantees various rights within the framework of Shari’a and customary law. It partially resuscitated long dormant conflict-of-interest measures by banning cabinet ministers from being officers of public shareholding firms. Perhaps most importantly, the Basic Statute provides rules for the royal succession.

Oman’s judicial system is based on Shari’a—the Quranic laws and the oral teachings of the Islamic Prophet Muhammad. Traditionally, family courts fell under the jurisdiction of the Ministry of Justice, Awqaf, and Islamic Affairs (since divided into the Ministry of Justice and the Ministry of Endowments and Religious Affairs). Oman’s first criminal code was not enacted until 1974.

In 1999, royal decrees placed the entire court system under the financial supervision of the Ministry of Justice, though the 1996 Basic Statute ensures the independence of the judiciary. Also, an independent Office of the Public Prosecutor (formerly a part of the Royal Oman Police) and a supreme court were created. Regional court complexes were envisioned to house the various courts, including the courts of first instance for criminal cases and Shari’a cases (family law and inheritance).

The country is divided into 63 administrative districts (wilayats), presided over by appointed executives (walis) responsible for settling local disputes, collecting taxes, and maintaining peace. Most wilayats are small in area, but can vary considerably in population. The 63 wilayats are divided into 11 governorates. The governors are appointed directly by the Sultan and hold Minister of State or Under Secretary rank. Walis, however, are appointed by the Minister of Interior.

Although Oman enjoys a high degree of internal stability, regional tensions in the aftermath of the 1980-88 Iran-Iraq war, 1990-91 Persian Gulf war, and Operations Enduring Freedom and Iraqi Freedom continue to necessitate large defense expenditures. In 2006, Oman spent roughly $3.84 billion for defense and national security—over 33% of its public expenditures. Oman maintains a small but professional and effective military, supplied mainly with British equipment in addition to items from the United States, France, and other countries. British officers, on loan or on contract to the Sultanate, help staff the armed forces, although a program of « Omanization » has steadily increased the proportion of Omani officers over the past several years.

After North and South Yemen merged in May 1990, Oman settled its border disputes with the new Republic of Yemen on October 1, 1992. The two neighbors have cooperative bilateral relations. Oman’s borders with all neighbors are demarcated, including a 2002 demarcation of the Oman-U.A.E. border that was ratified in 2003.

Ambassador to the United States—Hunaina Sultan al-MughairyPermanent Representative to the UN—Lyutha Sultan al-Mughairy

Oman maintains an embassy in the United States at 2535 Belmont Rd. NW, Washington, DC 20008 (tel. 202-387-1980)

ECONOMYWhen Oman declined as an entrepot for arms and slaves in the mid-19th century, much of its former prosperity was lost, and the economy turned almost exclusively to agriculture, camel and goat herding, fishing, and traditional handicrafts. Today, oil and gas fuel the economy, and revenues from petroleum products have enabled Oman’s dramatic development over the past 40 years.

Oil was first discovered in the interior near Fahud in the western desert in 1964. Petroleum Development (Oman) Ltd. (PDO) began production in August 1967. The Omani Government owns 60% of PDO, and foreign interests own 40% (Royal Dutch Shell owns 34% ; the remaining 6% is owned by Compagnie Francaise des Petroles [Total] and Partex). In 1976, Oman’s oil production rose to 366,000 barrels per day (b/d) but declined gradually to about 285,000 b/d in late 1980 due to the depletion of recoverable reserves. From 1981 to 1986, Oman compensated for declining oil prices by increasing production levels to 600,000 b/d. With the collapse of oil prices in 1986, however, revenues dropped dramatically. Production was cut back temporarily in coordination with the Organization of Petroleum Exporting Countries (OPEC)—of which Oman is not a member—and production levels again reached 600,000 b/d by mid-1987, which helped increase revenues. By 2000, production had climbed to more than 900,000 b/d ; however, it declined to roughly 750,000 b/d for 2006. Now at 865,000 b/d, Oman is on track to reach its goal of 1 million b/d through the use of innovative enhanced oil recovery techniques.

Natural gas reserves, which will increasingly provide the fuel for industrial projects in Sohar and power generation and desalination plants throughout the Sultanate, stand at 24 trillion cubic feet. A liquefied natural gas (LNG) processing plant located in Sur was opened in 2000, with production capacity of 6.6 million tons per year (tons/yr), as well as unsubstantial gas liquids, including condensates. The completion of the plant’s expansion in December 2005 increased capacity to 10.3 million tons/yr.

Oman does not have the immense oil resources of some of its neighbors. Total proven reserves are about 4.8 billion barrels. Oman’s complex geology makes exploration and production an expensive challenge. Recent improvements in technology, however, have enhanced recovery.

Agriculture and fishing are the traditional way of life in Oman. Dates, grown extensively in the Batinah coastal plain and the highlands, make up most of the country’s agricultural exports. Coconut palms, wheat, and bananas also are grown, and cattle are raised in Dhofar. Other areas grow cereals and forage crops. Poultry production is steadily rising. Fish and shellfish exports totaled $104.7 million in 2006.

The government is undertaking many development projects to modernize the economy, improve the standard of living, and become a more active player in the global marketplace. Oman became a member of the World Trade Organization in October 2000, and continues to men dits financial and commercial practices to conform to international standards. The country signed a free trade agreement with the United States in January 2006, which entered into force in January 2009. Oman continues to pursue, through the Gulf Cooperation Council (GCC), free trade agreements with a number of other key trading partners, including the European Union and India.

Increases in agriculture and especially fish production are believed possible with the application of modern technology. The Muscat capital area has both an international airport at Seeb and a deepwater port at Port Sultan Qaboos. The large-scale modern container port and free zone at Salalah, capital of the Dhofar Governorate, continues to operate at near-capacity levels. The government in early 2004 approved a project worth over $250 million to add two berths and extend the breakwater at the port. Port expansion with a focus on tourist cruise ships is underway at Port Sultan Qaboos, and a large industrial and container port and free zone is in operation in Sohar. A national road network includes a $400 million highway linking the northern and southern regions. The government also recently expanded passenger and cargo capacity at its main international airports at Seeb (Muscat) and Salalah, and will construct new airports at Sohar, Ras al-Hadd, and Duqm, where a dry dock recently began operations and a modern city and free zone are planned. In an effort to diversify the economy, in the early 1980s, the government built a $200-million copper mining and refining plant at Sohar. Other large industrial projects underway or being considered include an 80,000 b/d oil refinery, a large petrochemical complex, fertilizer and methanol plants, an aluminum smelter, and two cement factories. Industrial zones at Rusayl, Sohar, and several other locations showcase the country’s modest light industries. Marble, limestone, copper, and gypsum may prove commercially viable in the future.

The Omani Government embarked on its seventh 5-year plan in 2006. In its efforts to reduce its dependence on oil and expatriate labor, the government projects significant increases in spending on industrial and tourism-related projects to foster income diversification, job creation for Omanis in the private sector, and development of Oman’s interior. Government programs offer soft loans and emphasize the building of new industrial estates in population centers outside the capital area. The government is giving greater emphasis to « Omanization » of the labor force, particularly in banking, hotels, and oil and gas operations benefiting from government subsidies. Currently, efforts are underway to liberalize investment opportunities in order to attract foreign capital, such as updating the foreign investment law. From 1996-2008, Oman’s non-oil exports grew at a compound annual rate of more than 20%.

Some of the largest budgetary outlays are in the areas of health services and basic education. The number of schools, hospitals, and clinics has risen exponentially since the accession of Sultan Qaboos in 1970. After the Arab Spring protests in early 2011, the Government of Oman authorized a 1 billion Omani rial ($2.6 billion) increase in social spending—including stipends for military and civil service employees and scholarships—along with new mandates for the private sector such as an increase in the minimum wage and a push to boost hiring of Omani citizens.

U.S. firms face a small and highly competitive market dominated by trade with Japan and Britain and re-exports from the United Arab Emirates. The sale of U.S. products also is hampered by higher transportation costs and the lack of familiarity with Oman on the part of U.S. exporters. However, the traditional U.S. market in Oman, oil field supplies and services, should grow as the country’s major oil producer continues a major expansion of fields and wells. Major new U.S. investments in oil production, industry, and tourism projects in 2005 totaled several billion dollars. Negotiations on the U.S.-Oman Free Trade Agreement (FTA) were successfully concluded in October 2005 ; the FTA was ratified by the U.S. Congress and signed by President George W. Bush in 2006. It entered into force on January 1, 2009, providing further impetus to bilateral trade and investment by offering advantages such as exemption from duties, national treatment, and 100% foreign ownership.

FOREIGN RELATIONSWhen Sultan Qaboos assumed power in 1970, Oman had limited contacts with the outside world, including neighboring Arab states. Only two countries, the United Kingdom and India, maintained a diplomatic presence in the country. A special treaty relationship permitted the United Kingdom close involvement in Oman’s civil and military affairs. Ties with the United Kingdom have remained very close under Sultan Qaboos. Bilateral ties with China have also increased considerably since 2007, as trade between the two nations has expanded rapidly.

Since 1970, Oman has pursued a moderate foreign policy and expanded its diplomatic relations dramatically. It supported the 1979 Camp David accords and was one of three Arab League states, along with Somalia and Sudan, which did not break relations with Egypt after the signing of the Egyptian-Israeli Peace Treaty in 1979. During the 1980-88 Iran-Iraq war, Oman maintained diplomatic relations with both sides while strongly backing UN Security Council resolutions calling for an end to the war. Oman has developed close ties to its neighbors ; it joined the six-member Gulf Cooperation Council when it was established in 1981.

During the Cold War period, Oman avoided relations with communist countries because of communist support for the insurgency in Dhofar. In recent years, Oman has undertaken diplomatic initiatives in the Central Asian republics, particularly in Kazakhstan, where it is involved in a joint oil pipeline project. In addition, Oman maintains relations with Iran, and the two countries regularly exchange delegations. Oman is an active member in international and regional organizations, notably the Arab League and the GCC.

Oman has traditionally supported Middle East peace initiatives, as it did those in 1983. In April 1994, Oman hosted the plenary meeting of the Water Working Group of the peace process, the first Gulf state to do so. From 1996-2000, Oman and Israel exchanged trade offices. Oman closed the Israeli Trade Office in October 2000 in the wake of public demonstrations against Israel at the start of the second intifada.

U.S.-OMANI RELATIONSThe United States has maintained relations with the Sultanate since the early years of American independence. A treaty of friendship and navigation, one of the first agreements of its kind with an Arab state, was concluded between the United States and Muscat in 1833. This treaty was replaced by the Treaty of Amity, Economic Relations, and Consular Rights signed at Salalah on December 20, 1958.

A U.S. consulate was maintained in Muscat from 1880 until 1915. Thereafter, U.S. interests in Oman were handled by U.S. diplomats resident in other countries. In 1972, the U.S. ambassador in Kuwait was accredited also as the first U.S. ambassador to Oman, and the U.S. embassy, headed by a resident charge d’affaires, was opened. The first resident U.S. ambassador took up his post in July 1974. The Sultanate of Oman opened its embassy in Washington, DC, in 1973.

U.S.-Omani relations were deepened in 1980 by the conclusion of two important agreements. One provided access to Omani military facilities by U.S. forces under agreed-upon conditions. The other agreement established a Joint Commission for Economic and Technical Cooperation, located in Muscat, to provide U.S. economic assistance to Oman. The Joint Commission continued in existence until the mid-1990s. A Peace Corps program, which assisted Oman mainly in the fields of health and education, was initiated in 1973 and phased out in 1983. A team from the Federal Aviation Administration worked with Oman’s Civil Aviation Department on a reimbursable basis but was phased out in 1992.

In March 2005, the U.S. and Oman launched negotiations on a free trade agreement that were successfully concluded in October 2005. The FTA was signed on January 19, 2006, and entered into force on January 1, 2009.

In 1974 and April 1983, Sultan Qaboos made state visits to the United States. Vice President George H.W. Bush visited Oman in 1984 and 1986, and President Bill Clinton visited briefly in March 2000. Vice President Richard Cheney visited Oman in 2002, 2005, and 2006.

GovernmentType: Constitutional monarchy.Independence: September 3, 1971.Constitution: Approved by popular vote 2003; came into force June 2005.Branches: Executive–Council of Ministers. Legislative–Advisory Council (currently appointed pending elections in 2013; has assumed only limited responsibility to date). Judicial–independent.Subdivisions: Fully centralized government; seven municipalities.Political parties: None.Suffrage: Universal over age 18, since 1999.

PEOPLENatives of the Arabian Peninsula, many Qataris are descended from a number of migratory tribes that came to Qatar in the 18th century from the neighboring areas of Nejd and Al-Hasa. Some came from neighboring Gulf emirates and others are descended from Persian merchants. Most of Qatar’s 1.7 million inhabitants live in Doha, the capital. Foreigners with temporary residence status make up over three-fourths of the population. Foreign workers comprise more than 90% of the total labor force. Most are South and Southeast Asians, Egyptians, Palestinians, Lebanese, Syrians, and Iranians. About 12,000 private U.S. citizens reside in Qatar.

For centuries, the main sources of wealth were pearling, fishing, and trade. At one time, Qataris owned nearly one-third of the Persian Gulf fishing fleet. With the Great Depression and the introduction of Japan’s cultured-pearl industry, pearling in Qatar declined drastically.

Most Qataris are Sunni Muslims. Islam is the official religion, and Islamic jurisprudence is the official basis of Qatar’s legal system, although civil courts have jurisdiction over commercial law. Arabic is the official language, but English is more widely spoken. Education is compulsory and free for all government employees’ children from 6-16 years old. Qatar has a high literacy rate.

HISTORYQatar has been inhabited for millennia. Several families, including branches of the Bani Naim, lived in the peninsula, with the Al Thani and Al Misnad clans becoming the strongest. The Al Khalifa family (which now rules Bahrain) largely dominated the area until 1868 when, at the request of Qatari nobles, the British negotiated the termination of the Khalifa claim, except for the payment of tribute. The tribute ended when the Ottoman Empire occupied Qatar in 1872. When the Ottomans left at the beginning of World War I, the British recognized Sheikh Abdullah bin Jassim Al Thani as ruler. The 1916 treaty between the United Kingdom and Sheikh Abdullah was similar to those entered into by the British with other Gulf principalities. Under it, the ruler agreed not to dispose of any of his territory except to the U.K. and not to enter into relationships with any other foreign government without British consent. In return, the British promised to protect Qatar from all aggression by sea and to lend their good offices in case of a land attack. A 1934 treaty granted more extensive British protection.

In 1935, a 75-year oil concession was granted to the Qatar Petroleum Company, a subsidiary of the Iraq Petroleum Company, which was owned by Anglo-Dutch, French, and U.S. interests. High-quality oil was discovered in 1940 at Dukhan, on the western side of the Qatari peninsula. However, the start of WWII delayed exploitation of Qatar’s oil resources, and oil exports did not begin until 1949.

During the 1950s and 1960s gradually increasing oil revenues brought prosperity, rapid immigration, substantial social progress, and the beginnings of Qatar’s modern history. When the U.K. announced a policy in 1968 (reaffirmed in March 1971) of ending the treaty relationships with the Gulf sheikdoms, Qatar joined the other eight states then under British protection (the seven trucial sheikdoms–the present United Arab Emirates–and Bahrain) in a plan to form a union of Arab emirates. By mid-1971, as the termination date of the British treaty relationship (end of 1971) approached, the nine still had not agreed on terms of union. Accordingly, Qatar declared independence as a separate entity and became the fully independent State of Qatar on September 3, 1971.

In February 1972, the Heir Apparent, Sheikh Khalifa bin Hamad, deposed his cousin, Amir Ahmad, and assumed power. Key members of the Al Thani family supported this move, which took place without violence or signs of political unrest.

On June 27, 1995, the Deputy Amir, Sheikh Hamad bin Khalifa, deposed his father Amir Khalifa in a bloodless coup. An unsuccessful counter-coup was staged in 1996. The Amir and his father are now reconciled, though some supporters of the counter-coup remain in prison. The Amir announced his intention for Qatar to move toward democracy and has permitted a freer and more open press and municipal elections as a precursor to expected parliamentary elections. Qatari citizens approved a new constitution via public referendum in April 2003, which came into force in June 2005.

GOVERNMENT AND POLITICAL CONDITIONSThe head of state is the Amir, and the right to rule Qatar is passed on within the Al Thani family, specifically to the current Amir’s sons. Shaykh Tamim bin Hamad, the Amir’s second son by Shaykha Moza bint Nasir al-Misnad, is the Heir Apparent and Deputy Amir, and has no rivals for succession. Politically, Qatar is evolving from a traditional society to one based on more formal and democratic institutions to meet the requirements of social and economic progress. The country’s constitution formalizes the hereditary rule of the Al Thani family, but it also establishes an elected legislative body and makes government ministers accountable to the legislature. In current practice, the Amir’s role is influenced by continuing traditions of consultation, rule by consensus, and the citizen’s right to appeal personally to the Amir. The Amir, while directly accountable to no one, cannot violate the Shari’a (Islamic law) and, in practice, must consider the opinions of leading families and the religious establishment.

The opinions of the people are institutionalized in the Advisory Council, an appointed body that assists the Amir in formulating policy. Elections in 1999, in which both men and women participated, resulted in the formation of a municipal council. One woman candidate was elected to the municipal council in 2003. Municipal elections were held for the fourth time in 2011, and Advisory Council elections will be held for 2013.

There has been no serious challenge to Al Thani rule. As the most visible sign of the move toward openness, the Al Jazeera satellite television station based in Qatar is considered the most free and unfettered broadcast source in the Arab world. In practice, Al Jazeera rarely criticizes the ruling Al Thani family or addresses Qatar’s domestic issues.

Qatar maintains an embassy in the United States at 2555 M Street, NW, Washington, DC 20037 (tel. 202-274-1600) and a consulate in Houston at 4265 San Felipe Street, Suite 1100, Houston, Texas 77207 (tel. 713-968-9840). Qatar’s Permanent Mission to the United Nations is at 747 Third Ave., 22nd floor, New York, NY 10017 (tel. 212-486-9335).

DEFENSEQatar’s defense expenditures are relatively minimal (in the single digits as a percentage of GDP). Qatar maintains a modest military force of about 12,000 men total, including an army, navy, and air force. The country has a public security force of about 10,000 men, including police, a coast guard, national firefighting force, air wing, marine police, and an internal security force. Qatar also has signed defense pacts with the U.S., U.K., and France. Qatar plays an active role in the collective defense efforts of the Gulf Cooperation Council (GCC–the regional organization of the Arab states in the Gulf; the other five members are Saudi Arabia, Kuwait, Bahrain, the U.A.E., and Oman). Qatari forces played an important role in the first Gulf War and the 2011 revolution in Libya, and Qatar has supported U.S. military operations critical to the success of Operation Enduring Freedom and Operation Iraqi Freedom. Qatar hosts CENTCOM Forward Headquarters.

ECONOMYOil formed the cornerstone of Qatar’s economy well into the 1990s and still accounts for about 62% of total government revenue. In 1973, oil production and revenues increased sizably, moving Qatar out of the rank of the world’s poorest countries and providing it with one of the highest per capita incomes. In 2007, Qatar’s per capita income of nearly $67,000 was the fifth-highest in the world.

Qatar’s economy suffered a downturn from in the mid-1990s. Lower Organization of Petroleum Exporting Countries (OPEC) oil production quotas, a fall in oil prices, and the generally unpromising outlook on international markets reduced oil earnings. In turn, the Qatari Government cut spending plans to match lower income. The resulting recessionary local business climate caused many firms to lay off expatriate staff. With the economy recovering in the late 1990s, expatriate populations have grown again.

As of 2007, oil production was around 835,000 barrels a day (bpd), and was expected to reach 1.1 million bpd by 2009. At the current production pace, oil reserves are expected to last more than 40 years. Moreover, Qatar’s proven reserves of gas are the third-largest in the world, exceeding 900 trillion cubic feet (14% of the world’s total proven gas reserves). Qatar shares with Iran the largest single non-associated gas field in the world, the North Field. Qatar is the world’s largest producer of liquefied natural gas (LNG), with a capacity of more than 31 million metric tons per annum (mmta) as of 2007. By 2010, Qatar produced more than 77 mmta for LNG exports, accounting for over one-third of the world’s LNG supply.

The 1991 completion of the $1.5-billion Phase I of the North Field gas development project strongly boosted the economy. In 1996, Qatar began exporting liquefied natural gas to Japan. Further phases of North Field gas development costing billions of dollars are in various stages of planning and development, and Qatar has concluded agreements with the U.A.E. to export gas via pipelines and to Spain, Turkey, Italy, the U.S., France, South Korea, India, China, Taiwan, and the U.K. via ship. However, the government halted any further expansion of gas production until 2010, as it assessed its plans for future exploitation of the field.

Qatar’s natural gas liquefaction facilities and related industries are located in Ras Laffan Industrial City, site of the world’s largest LNG exports of more than 31 million metric tons per year. Qatar’s heavy industrial base, located in Messaieed, includes a refinery with a 140,000 bpd capacity, a fertilizer plant for urea and ammonia, a steel plant, and a petrochemical plant, and several new petrochemical plants will be built in the coming years. All these industries use gas for fuel. Most are joint ventures between U.S., European, and Japanese firms and the state-owned Qatar Petroleum (QP). The U.S. is the major equipment supplier for Qatar’s oil and gas industry, and U.S. companies are playing a major role in the development of the oil and gas sector and petrochemicals.

The country’s economic growth has been stunning. Qatar’s nominal GDP, estimated to be $129 billion for 2010, has recently been growing at an average of 15%, with an inflation-adjusted 2010 growth rate estimated at 17%. Qatar’s 2007 per capita GDP was $138,000, the highest in the world. The Qatari Government’s strategy is to utilize its wealth to generate more wealth by diversifying the economic base of the country beyond hydrocarbons.

Qatar pursues a program of “Qatarization,” under which all joint venture industries and government departments strive to move Qatari nationals into positions of greater authority. Growing numbers of foreign-educated Qataris, including many educated in the U.S., are returning home to assume key positions formerly occupied by expatriates. In order to control the influx of expatriate workers, Qatar has tightened the administration of its foreign manpower programs over the past several years. Security is the principal basis for Qatar’s strict entry and immigration rules and regulations.

FOREIGN RELATIONSQatar achieved full independence in an atmosphere of cooperation with the U.K. and friendship with neighboring states. Most Arab states, the U.K., and the U.S. were among the first countries to recognize Qatar, and the state promptly gained admittance to the United Nations and the Arab League. Qatar established diplomatic relations with the U.S.S.R. and China in 1988. It was an early member of OPEC and a founding member of the GCC.

In September 1992, tensions arose with Saudi Arabia when Saudi forces allegedly attacked a Qatari border post, resulting in two deaths. Relations have since improved. In December 2008, Qatar and Saudi Arabia signed a land and maritime border agreement while pledging mutual cooperation on a number of industrial and commercial issues.

For years, both Qatar and Bahrain claimed ownership of the Hawar Islands. The case was eventually referred to the International Court of Justice (ICJ) in The Hague. The ICJ issued a ruling in June 2001, which both sides accepted. In the agreement Bahrain kept the main Hawar Island but dropped claims to parts of mainland Qatar, while Qatar retained significant maritime areas and their resources.

U.S.-QATARI RELATIONSBilateral relations are strong and expanding. The U.S. embassy was opened in March 1973. The first resident U.S. ambassador arrived in July 1974. Ties between the U.S. and Qatar are excellent. Amir Hamad last visited Washington in April 2011, and President George W. Bush visited Qatar in 2003. Qatar and the United States coordinate closely on regional diplomatic initiatives, cooperate to increase security in the Gulf, and enjoy extensive economic links, especially in the hydrocarbons sector. Qatar sees the development of a world-class educational system as key to its continued success. As a result, hundreds of Qataris study in the United States. Cornell University has established a degree-granting branch medical school campus in Doha, and other universities including Texas A&M, Carnegie Mellon University, the Virginia Commonwealth University School of Design, the Georgetown School of Foreign Service, and Northwestern also have branch campuses in Qatar’s “Education City” complex.

The U.S. Embassy in Qatar is located in Doha at 22 February Road, Al Luqta District, Doha, Qatar. Mailing address: P.O. Box 23, Doha. Tel.: 974-488-4161; fax 4884150. The embassy is open Sunday through Thursday (Qatar’s workweek), closed for U.S. and Qatari holidays.

Government Type: Federation with specified powers reserved for the U.A.E. federal government and other powers reserved to member emirates.Independence: December 2, 1971.Provisional constitution: December 2, 1971.Branches: Executive–7-member Supreme Council of Rulers (comprising the hereditary rulers of each Emirate), which elects president and vice president; prime minister is selected by president. Legislative–40-member Federal National Council (consultative only). Judicial–Islamic and secular courts.Administrative subdivisions: Seven largely self-governing emirates.Political parties: None.Suffrage: State-nominated electors chose half of the Federal National Council members in 2006 and 2011. The other half were directly appointed by the leadership of each Emirate.Federal government budget (2011): 41 billion AED (United Arab Emirates dirhams), or approx. U.S. $11 billion.

PEOPLE Of the total 8.9 million residents, less than 15% are Emirati, more than one-third are South Asian, and a significant number are from Europe and North Africa.

The majority of Emirati citizens are Sunni Muslim with a Shi’a minority. Many foreigners are Muslim; Hindus and Christians make up a portion of the U.A.E.’s foreign population.

Educational standards are rising rapidly. Citizens and temporary residents have taken advantage of higher education facilities throughout the country. In the 2010 spring semester, U.A.E. University in Al Ain had roughly 12,000 students and American University Sharjah had over 5,000 students enrolled. The Higher Colleges of Technology, a network of technical-vocational colleges, opened in 1989 with men’s and women’s campuses in each emirate. Zayed University for women opened in 1998 with campuses in Abu Dhabi and Dubai. Many foreign universities, including ones from the U.S., U.K., and Australia, also have campuses in the U.A.E.

HISTORY The U.A.E. was formed from the group of tribally organized Arabian Peninsula sheikhdoms along the southern coast of the Persian Gulf and the northwestern coast of the Gulf of Oman. For centuries, the sheikhdoms were embroiled in dynastic disputes. It became known as the Pirate Coast as raiders based there harassed foreign shipping, despite both European and Arab navies patrolling the area from the 17th to the 19th century. Early British expeditions to protect India trade from raiders at Ras al-Khaimah led to campaigns against other harbors along the coast in 1819. The next year, a general peace treaty was signed to which all the principal sheikhs of the coast adhered. Raids continued intermittently until 1835, when the sheikhs agreed not to engage in hostilities at sea. In 1853, they signed a treaty with the United Kingdom, under which the sheikhs (the “Trucial Sheikhdoms”) agreed to a “perpetual maritime truce.” It was enforced by the United Kingdom, and disputes among sheikhs were referred to the Political Resident, a British civil servant, for settlement.

Primarily in reaction to the ambitions of other European countries, the United Kingdom and the Trucial Sheikhdoms established closer bonds in an 1892 treaty, similar to treaties entered into by the U.K. with other Gulf principalities. The sheikhs agreed not to dispose of any territory except to the United Kingdom and not to enter into relationships with any foreign government other than the United Kingdom without its consent. In return, the British promised to protect the Trucial Coast from all aggression by sea and assist the Sheikhs in the case of land attack.

In 1955, the United Kingdom sided with Abu Dhabi in the latter’s dispute with Saudi Arabia over the Buraimi Oasis and other territory to the south. A 1974 agreement between Abu Dhabi and Saudi Arabia almost settled their border dispute, but the agreement was never ratified by the U.A.E. Government. The border with Oman also remains officially unsettled, although the two governments agreed to delineate the border in May 1999.

In 1968, the U.K. announced its decision to end the treaty relationships with the seven Trucial Sheikhdoms which had been, together with Bahrain and Qatar, under British protection. The nine attempted to form a union of Arab emirates, but by mid-1971 they were unable to agree on terms of union. Bahrain became independent in August and Qatar in September, 1971. When the British-Trucial Sheikhdoms treaty expired on December 1, 1971, they became fully independent. On December 2, 1971, six of them entered into a union called the United Arab Emirates. The seventh, Ras al-Khaimah, joined in early 1972. Abu Dhabi’s ruler, Sheikh Zayed bin Sultan al Nahyan was elected by the Supreme Council as President and Dubai’s ruler, Sheikh Rashid bin Said al Maktoum, became Prime Minister.

The U.A.E. sent forces to help liberate Kuwait during the 1990-91 Gulf War. U.A.E. troops have also participated in peacekeeping missions to Lebanon, Somalia, Bosnia, Albania, Kosovo, and Afghanistan.

In 2004, the U.A.E.’s first and only president until that time, Sheikh Zayed bin Sultan Al Nahyan, died. His eldest son and Crown Prince, Khalifa bin Zayed Al Nahyan, succeeded him as Ruler of Abu Dhabi. In accordance with the Constitution, the U.A.E.’s Supreme Council of Rulers elected Khalifa bin Zayed Al Nahyan as U.A.E. Federal President. Mohammed bin Zayed al Nahyan succeeded Khalifa as Crown Prince of Abu Dhabi. In January 2006, Sheikh Maktoum bin Rashid Al Maktoum, U.A.E. Vice President and Prime Minister and Ruler of Dubai, passed away and was replaced by his brother, Sheikh Mohammed bin Rashid Al Maktoum.

GOVERNMENT Administratively, the U.A.E. is a loose federation of seven emirates, each with its own ruler. Under the provisional constitution of 1971, each emirate reserves considerable powers, including control over mineral rights (notably oil and gas) and revenues. In this milieu, federal powers have developed slowly. The constitution established the positions of President (Chief of State) and Vice President, each serving 5-year terms; a Council of Ministers, led by a Prime Minister (head of government); a supreme council of rulers; and a 40-member Federal National Council (FNC). The FNC is a consultative body with half its members appointed by the emirate rulers and half elected through an electorate chosen by the rulers of each emirate.

The U.A.E. maintains an embassy in the United States at 3522 International Court, NW, Washington, DC, 20008 (tel. 202-243-2400). The U.A.E. Mission to the UN is located at 747 3rd Avenue, 36th Floor, New York, NY 10017 (tel. 212-371-0480).

POLITICAL CONDITIONS While the U.A.E. has worked to strengthen its federal institutions since achieving independence, each emirate still retains substantial autonomy. A basic concept in the U.A.E. Government’s development as a federal system is that a significant percentage of each emirate’s revenues should be devoted to the U.A.E. central budget.

The U.A.E. has no political parties. The rulers hold power on the basis of their dynastic position and their legitimacy in a system of tribal consensus. Rapid modernization, enormous strides in education, and the influx of a large foreign population have changed the face of the society. In December 2006, the U.A.E. held its first-ever limited elections to select half the members of the FNC. Ballots were cast by electors selected by the ruler of each emirate. One woman was elected to the FNC and additional women were appointed to be council members. In September 2011, the U.A.E. held its second FNC elections, this time expanding the electoral pool from under 7,000 in 2006 to nearly 130,000 voters. Again, one woman was elected; an additional six were later appointed.

DEFENSE The Trucial Oman Scouts, long the symbol of public order on the coast and commanded by British officers, were turned over to the U.A.E. as its defense forces in 1971. The U.A.E. Armed Forces, consisting of 64,000, are headquartered in Abu Dhabi and are primarily responsible for the defense of the seven emirates.

Although small in number, the U.A.E. armed forces are equipped with some of the most modern weapon systems, purchased from a variety of countries. In 2010 and 2011, the U.A.E. was one of the largest foreign buyers of U.S. defense equipment with a portfolio value of $14B The military has been reducing the number of foreign nationals in its ranks, and its officer corps is composed almost entirely of U.A.E. nationals. The U.A.E. air force has about 4,000 personnel. The Air Force has advanced U.S. F-16 BLOCK 60 multirole fighter aircraft. Other equipment includes French Mirage 2000-9 fighters, British Hawk trainer aircraft, 36 transport aircraft and U.S. Apache and Black Hawk helicopters. In 2011, the UAE Air Force participated in Operation Unified Protector in Libya, conducting air-to-air and air-to-ground operations. The U.A.E. Navy is small–about 2,500 personnel–and maintains 12 well-equipped coastal patrol boats and 8 missile boats. Although primarily concerned with coastal defense, the Navy is constructing a six-unit class of blue water corvettes in conjunction with French shipbuilder CMN. The U.A.E.’s Land Forces are equipped with several hundred French LeClerc tanks and a similar number of Russian BMP-3 armored fighting vehicles. In early 2010, the Presidential Guard (PG) was formed. The PG is comprised of Marines, Reconnaissance, Aviation, Special Forces/Amiri Guard and Mechanized Brigades. PG personnel are conducting operations in Afghanistan (the only Arab personnel undertaking full-scale operations in the country).

The U.A.E. contributes to the continued security and stability of the Gulf and the Strait of Hormuz. It is a leading partner in U.S. counterterrorism efforts, providing assistance in the military, diplomatic, and financial arenas since September 11, 2001.

The U..A.E. also contributes to international counterpiracy efforts. It hosted a counterpiracy conference in Spring 2011 – the first such conference co-hosted by a foreign government and private industry, which also (as another first in the case of private industry) succeeded in raising donations to be put towards the UN Trust Fund. The U.A.E. continues to look for ways to improve its efforts. It will reportedly host another counterpiracy conference in 2012. The U.A.E. also will host the Spring 2012 plenary meeting of the UN Contact on Piracy Off the Coast of Somalia.

Also on the piracy front, two U.A.E. vessels were pirated in 2011. Most notable was the M/V Arrilah, which the U.A.E. military successfully retook.

ECONOMY Prior to the first exports of oil in 1962, the U.A.E. economy was dominated by pearl production, fishing, agriculture, and herding. Since the rise of oil prices in 1973, however, petroleum has dominated the economy, accounting for most of its export earnings and providing significant opportunities for investment. The U.A.E. has huge proven oil reserves, estimated at 97.8 billion barrels in 2011, with gas reserves estimated at 214.2 trillion cubic feet; at present production rates, these supplies would last well over 150 years. In 2009, the U.A.E. produced about 2.41 million barrels of oil per day.

Major increases in imports have occurred in manufactured goods, machinery, and transportation equipment, which together have accounted for 70% of total imports. Another important foreign exchange earner, the Abu Dhabi Investment Authority–which controls the investments of Abu Dhabi, the wealthiest emirate–manages an estimated $600 billion in overseas investments.

More than 6,000 companies from more than 120 countries operate at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transshipment enjoy a 100% duty exemption. A major power plant with associated water desalination units, an aluminum smelter, and a steel fabrication unit are prominent facilities near the complex.

Except in the free trade zone, the U.A.E. requires at least 51% local citizen ownership in all businesses operating in the country as part of its attempt to place Emiratis in leadership positions.

As a member of the Gulf Cooperation Council (GCC), the U.A.E. participates in a wide range of GCC activities that focus on economic issues. These include regular consultations and development of common policies covering trade, investment, banking and finance, transportation, telecommunications, and other technical areas, including protection of intellectual property rights.

FOREIGN RELATIONS The U.A.E. is a member of the United Nations and the Arab League and has established diplomatic relations with more than 60 countries, including the U.S., Japan, Russia, the People’s Republic of China, and most western European countries. It has played a moderate role in the Organization of Petroleum Exporting Countries, the Organization of Arab Petroleum Exporting Countries, the United Nations, and the GCC.

Substantial development assistance has increased the U.A.E.’s stature among recipient states. Most of this foreign aid (in excess of $15 billion over time) has been to Arab and Muslim countries. In 2007, the U.A.E. pledged and delivered $300 million to Lebanon, and was the first country to fulfill its pledge. The U.A.E. has provided significant monetary and material support to the Iraqi Government, including a pledge of $215 million in economic and reconstruction assistance, and has also provided substantial aid to Afghanistan, Pakistan, and the Palestinian Authority.

The U.A.E. is a member of the following international organizations: UN and several of its specialized agencies (ICAO, ILO, UPU, WHO, WIPO); World Bank, International Monetary Fund (IMF), Arab League, Organization of the Islamic Conference, Organization of Petroleum Exporting Countries, Organization of Arab Petroleum Exporting Countries, and the Non-Aligned Movement. The U.A.E. is also a member of the International Renewable Energy Agency (IRENA) and hosts the headquarters at Abu Dhabi.

U.S.-U.A.E. RELATIONS The United States has enjoyed friendly relations with the U.A.E. since 1971. Private commercial ties, especially in petroleum (the U.A.E. is the only GCC state to allow private-sector participation in its oil and gas sector), have developed into friendly government-to-government ties, which include security cooperation. The U.A.E. is the United States’ single largest export market in the Middle East and North Africa region, with $14.4 billion in exports in 2008 and more than 750 U.S. firms operating locally. There are nearly 50 weekly non-stop flights to the U.A.E. from six U.S. cities. U.A.E. ports host more U.S. Navy ships than any port outside the U.S. The United States was the third country to establish formal diplomatic relations with the U.A.E. and has had an ambassador resident in the U.A.E. since 1974.

GeographyArea: 527,970 sq. km. (203,796 sq. mi.); about the size of California and Pennsylvania combined.Cities: Capital–Sanaa. Other cities–Aden, Taiz, Hodeida, and al-Mukalla.Terrain: Mountainous interior bordered by desert with a flat and sandy coastal plain.Climate: Temperate in the mountainous regions in the western part of the country, extremely hot with minimal rainfall in the remainder of the country. Humid on the coast.

PeopleNationality: Noun and adjective–Yemeni(s).Population (April 2011 est.): 25,130,000.Annual population growth rate: 3%.Ethnic group: Predominantly Arab.Religions: Islam including Shaf’i (Sunni), Zaydi (Shia), and a small but growing number of Salafi (Sunni). Additionally, there are a small number of Jews, Christians, and Hindus.Language: Arabic.Education: Attendance (2008 est.)–85% for boys at the primary level and 62% for girls. Attendance was 49% for boys at the secondary level and 26% for girls (2005 est.). Literacy (2009 est.)–62% overall, including 80% of males, 45% of females.Health: Infant mortality rate–53/1,000 live births (2008 est.). Life expectancy–64 years (2008 est.).Work force (by sector): Agriculture–53%; public services–17%; manufacturing–4%; construction–7%; percentage of total population–25%.

GovernmentType: Republic; unification (of former south and north Yemen): May 22, 1990.Constitution: Adopted May 21, 1990 and ratified May 1991.Branches: Executive–president, and prime minister with cabinet. Legislative–bicameral legislature with 111-seat Shura Council and 301-seat House of Representatives. Judicial–the constitution calls for an independent judiciary. The former northern and southern legal codes have been unified. The legal system includes separate commercial courts and a Supreme Court based in Sanaa.Administrative subdivisions: 22 governorates subdivided into districts.Main political parties: General People’s Congress (GPC), Islah Party, Yemeni Socialist Party (YSP).Suffrage: Universal over 18.National holiday: May 22 (Unity Day).

EconomyGDP (2010 est.) $31.273 billion.Per capita GDP (2010 est.): $1,281.Natural resources: Oil, natural gas, fish and seafood, rock salt, minor deposits of coal and copper.Agriculture (est. 8.2% of GDP): Products–qat (a shrub containing a natural amphetamine), coffee, cotton, fruits, vegetables, cereals, livestock and poultry. Arable land (est.)–3%.Industry (est. 38.8% of GDP): Types–petroleum refining, mining, wholesale and retail trade, transportation, manufacturing, and construction.Services (est. 53% of GDP).Trade: Exports (2010)–$7.5 billion: crude petroleum, liquefied natural gas, refined oil products, seafood, fruits, vegetables, hides, tobacco products. Major markets–China, India, Thailand, South Africa, South Korea, United States, Switzerland. Imports (2010)–$9.2 billion: petroleum products, cereals, feed grains, foodstuffs, machinery, transportation equipment, iron, sugar, honey. Major suppliers–United Arab Emirates, China, Saudi Arabia, India, Switzerland, Kuwait.Exchange rate (2011): Official rate 214 rials per U.S. $1. However, as of May 2011, black market exchange rates reached as high as 250 rials per U.S. $1. While the Yemeni rial (YR) usually floats freely based on an average of foreign currencies, in 2010, the Central Bank of Yemen (CBY) initiated a program of monetary interference in the exchange rate utilizing foreign currency reserves and restricted the export of currencies by money exchangers in an attempt to stabilize a rapidly depreciating rial. Due to the CBY’s efforts, the riyal’s official exchange rate has stabilized against the dollar over the past year. However, over that period, exchange rates at money exchangers have fluctuated between 10-20% higher than the official rate due to changes in the public’s overall confidence in Yemen’s political and economic stability.

PEOPLEUnlike other people of the Arabian Peninsula who have historically been nomads or semi-nomads, Yemenis are almost entirely sedentary and live in small villages and towns scattered throughout the highlands and coastal regions.

Yemenis are divided into two principal Islamic religious groups: the Shia Zaydi sect, found in the north and northwest, and the Shaf’i school of Sunni Muslims, found in the south and southeast. Yemenis are mainly of Semitic origin, although African strains are present among inhabitants of the coastal region. Arabic is the official language, although English is increasingly understood in major cities. In the Mahra area (the extreme east), several non-Arabic languages are spoken. When the former states of north and south Yemen were established, most resident minority groups departed.

HISTORYYemen was one of the oldest centers of civilization in the Near East. Between the 12th century BC and the 6th century AD, it was part of the Minaean, Sabaean, and Himyarite kingdoms, which controlled the lucrative spice trade, and later came under Ethiopian and Persian rule. In the 7th century, Islamic caliphs began to exert control over the area. After this caliphate broke up, the former north Yemen came under control of Imams of various dynasties usually of the Zaydi sect, who established a theocratic political structure that survived until modern times. (Imam is a religious term. The Shi’ites apply it to the prophet Muhammad’s son-in-law Ali, his sons Hassan and Hussein, and subsequent lineal descendants, whom they consider to have been divinely ordained unclassified successors of the prophet.)

Egyptian Sunni caliphs occupied much of north Yemen throughout the 11th century. By the 16th century and again in the 19th century, north Yemen was part of the Ottoman Empire, and in some periods its Imams exerted control over south Yemen.

Former North YemenOttoman control was largely confined to cities with the Imam’s suzerainty over tribal areas formally recognized. Turkish forces withdrew in 1918, and Imam Yahya Muhammad Hamid al-Din–who had established himself as the preeminent force in the northern highlands–strengthened his control over north Yemen. Yemen became a member of the Arab league in 1945 and the United Nations in 1947.

Imam Yahya died during an unsuccessful coup attempt in 1948. His son Ahmad succeeded him and ruled until his death in September 1962. Imam Ahmad’s reign was marked by growing repression, renewed friction with the United Kingdom over the British presence in the south, and growing pressures to support the Arab nationalist objectives of Egyptian President Gamal Abdul Nasser.

Ahmad’s son, Muhammad assumed power in 1962. Revolutionary forces deposed him soon thereafter as they took control of Sanaa and created the Yemen Arab Republic (YAR). Egypt assisted the YAR with troops and supplies to combat forces loyal to the Imamate. Saudi Arabia and Jordan supported Muhammad’s royalist forces to oppose the newly formed republic. Conflict continued periodically until 1967 when Egypt withdrew its troops. By 1968, following a final royalist siege of Sanaa, most of the opposing leaders reconciled; Saudi Arabia recognized the Republic in 1970.

Former South YemenAfter British forces captured the port of Aden in 1839, their influence increased in the south and eastern portion of Yemen. The United Kingdom ruled Aden as part of British India until 1937, when London made the port a crown colony with the remaining land designated as east Aden and west Aden protectorates. By 1965, most of the tribal states within the protectorates and the Aden colony proper had joined to form the British-sponsored federation of south Arabia.

In 1965, two rival nationalist groups–the Front for the Liberation of Occupied South Yemen (FLOSY) and the National Liberation Front (NLF) –turned to terrorism in their struggle to control the country. In 1967, in the face of uncontrollable violence, British troops began withdrawing, federation rule collapsed, and NLF elements took control after eliminating their FLOSY rivals. South Arabia, including Aden, declared independence on November 30, 1967, and renamed itself the People’s Republic of South Yemen. In June 1969, a radical wing of the Marxist NLF gained power and changed the country’s name on December 1, 1970, to the People’s Democratic Republic of Yemen (PDRY). In the PDRY, the government amalgamated all political parties into the Yemeni Socialist Party (YSP), which became the only legal party. The PDRY established close ties with the Soviet Union, China, Cuba, and radical Palestinians.

Republic of YemenIn 1972, the governments of the PDRY and the YAR declared that they approved a future union. However, they made little progress toward unification, and relations were often strained. In 1979, simmering tensions led to fighting, which was only resolved after Arab League mediation. The northern and southern heads of state reaffirmed the goal of unity during a March 1979 summit meeting in Kuwait. However, that same year the PDRY began sponsoring an insurgency against the YAR. In April 1980, PDRY President Abdul Fattah Ismail resigned and went into exile. His successor, Ali Nasir Muhammad, took a less interventionist stance toward both the YAR and neighboring Oman. On January 13, 1986, a violent struggle began in Aden between Ali Nasir Muhammad and the returned Abdul Fattah Ismail and his supporters. Fighting lasted for more than a month and resulted in thousands of casualties, Ali Nasir’s ouster, and Ismail’s death. Some 60,000 persons, including Ali Nasir and his supporters, fled to the YAR.

In May 1988, the YAR and PDRY governments came to an understanding that considerably reduced tensions including agreement to renew discussions concerning unification, establish a joint oil exploration area along their undefined border, demilitarize the border, and allow Yemenis unrestricted border passage on the basis of only a national identification card.

In November 1989, the leaders of the YAR (Ali Abdullah Saleh) and the PDRY (Ali Salim Al-Bidh) agreed on a draft unity constitution that they had originally drawn up in 1981. The Republic of Yemen (ROY) was declared on May 22, 1990. Ali Abdullah Saleh became President, and Ali Salim Al-Bidh became Vice President.

The leaders set a 30-month transitional period for completing the unification of the two political and economic systems. The 26-member YAR advisory council and the 17-member PDRY presidium jointly elected a presidential council. The presidential council appointed a Prime Minister, who formed a Cabinet. There was also a 301-seat provisional unified Parliament, consisting of 159 members from the north, 111 members from the south, and 31 independent members appointed by the chairman of the council.

The leaders agreed upon a unity constitution in May 1990, which the citizens ratified in a May 1991 popular referendum. The constitution affirmed Yemen’s commitment to free elections, a multiparty political system, the right to own private property, equality under the law, and respect of basic human rights. Parliamentary elections were held on April 27, 1993. International groups assisted in the organization of the elections and observed actual balloting. The resulting Parliament included 143 GPC, 69 YSP, 63 Islah (Yemeni Grouping for Reform, a party composed of various tribal and religious groups). The head of Islah, paramount sheikh of the powerful Hashid tribal confederation Abdullah Bin Hussein Al-Ahmar, was elected speaker of Parliament. He served in that capacity until his death in 2007.

Islah was invited into the ruling coalition, and the presidential council was altered to include one Islah member. Conflicts within the coalition resulted in the self-imposed exile of Vice President Ali Salim Al-Bidh to Aden beginning in August 1993 and a deterioration in the general security situation as political rivals settled scores and tribal elements took advantage of the unsettled situation.

Haydar Abu Bakr Al-Attas (former southern Prime Minister) continued to serve as the ROY Prime Minister, but his government was ineffective due to political infighting. Continuous negotiations between northern and southern leaders resulted in the signing of the document of pledge and accord in Amman, Jordan on February 20, 1994. Despite this, clashes intensified until civil war broke out in early May 1994.

Almost all of the actual fighting in the 1994 civil war occurred in the southern part of the country despite air and missile attacks against cities and major installations in the north. Southerners sought support from neighboring states and received billions of dollars of equipment and financial assistance. The United States strongly supported Yemeni unity, but repeatedly called for a cease-fire and a return to the negotiating table. Various attempts, including by a UN special envoy, were unsuccessful in bringing about a cease-fire.

Southern leaders declared secession and the establishment of the Democratic Republic of Yemen (DRY) on May 21, 1994, but the DRY was not recognized by the international community. Ali Nasir Muhammad supporters greatly assisted military operations against the secessionists, and northern troops captured Aden on July 7, 1994. Other resistance quickly collapsed and thousands of southern political and military leaders went into exile. Early during the fighting, President Ali Abdullah Saleh announced a general amnesty, which applied to everyone except a list of 16 persons. Most southerners returned to Yemen after a short exile.

An armed opposition was announced from Saudi Arabia, but no significant incidents within Yemen materialized. The government prepared legal cases against four southern leaders–Ali Salim Al- Bidh, Haydar Abu Bakr Al-Attas, Abd Al-Rahman Ali Al-Jifri, and Salih Munassar Al-Siyali–for misappropriation of official funds. Abd Al-Rahman Ali Al-Rahman was allowed to return to Yemen in 2006. Others on the list of 16 were told informally they could return to take advantage of the amnesty, but most remained outside Yemen. Although many of Ali Nasir Muhammad’s followers were appointed to senior governmental positions (including Vice President, Chief of Staff, and Governor of Aden), Ali Nasir Muhammad himself remained abroad in Syria.

In the aftermath of the civil war, YSP leaders within Yemen reorganized the party and elected a new politburo in July 1994. However, the party remained disheartened and lacked its former influence.

In 1994, amendments to the unity constitution eliminated the presidential council. On October 1, 1994, Parliament elected President Ali Abdullah Saleh to a 5-year term. In April 1997, Yemen held its second multiparty parliamentary elections. The country held its first direct presidential elections in September 1999, electing President Ali Abdullah Saleh to a 5-year term in what were generally considered credible elections.

Constitutional amendments adopted in the summer of 2000 extended the presidential term by 2 years, creating a 7-year presidential term. The constitution provides that henceforth the president will be elected by popular vote from at least two candidates selected by the legislature. The amendments also extended the parliamentary term of office to a 6-year term, with the next elections occurring in 2009. On February 20, 2001, a new constitutional amendment created a bicameral legislature consisting of a Shura Council (111 seats; members appointed by the president) and a House of Representatives (301 seats; members elected by popular vote). In April 2003, the third multiparty parliamentary elections were held with improvements in voter registration for both men and women and in a generally free and fair atmosphere. Two women were elected. In September 2006, citizens re-elected President Saleh to a second term in a generally open and competitive election, although there were multiple problems with the voting process and use of state resources on behalf of the ruling party.

GOVERNMENT AND POLITICAL CONDITIONSYemen is a republic with a bicameral legislature. Under the constitution, an elected president, an elected 301-seat House of Representatives, and an appointed 111-member Shura Council share power. The president is head of state, and the prime minister is head of government. The constitution provides that the president be elected by popular vote from at least two candidates endorsed by Parliament; the prime minister is appointed by the president. The presidential term of office is 7 years, and the parliamentary term of elected office is 8 years. Suffrage is universal over 18.

President Ali Abdullah Saleh was re-elected to a second term in 2006; the next presidential elections are scheduled for 2013 although demonstrations that began in February 2011 may result in an acceleration of this timeline. In the April 2003 parliamentary elections, the General People’s Congress (GPC) maintained an absolute majority. International observers judged elections to be generally free and fair, and there was a marked decrease from previous years in election-related violence; however, there were some problems with underage voting, confiscation of ballot boxes, voter intimidation, and election-related violence. Parliamentary elections scheduled for April 2009 were postponed until 2011 by a parliamentary vote extending the members’ term in office to 8 years. In the September 2006 local council elections, the GPC won a majority of seats on local and provincial councils. International observers judged the elections to be generally open and competitive, with another marked decrease in election-related violence.

The constitution calls for an independent judiciary. The former northern and southern legal codes have been unified. The legal system includes separate commercial courts and a Supreme Court based in Sanaa.

Principal Government OfficialsPresident–Ali Abdullah SalehVice President–Abd Al-Rab Mansur HadiPrime Minister–Ali Muhammad MujawwarDeputy Prime Minister and Minister of Local Administration–Rashad al-AlimiDeputy Prime Minister and Minister of Planning and International Cooperation–Abdulkarim Ismael al-ArhabiMinister of Defense–Mohammed Nasser AhmedMinister of Interior–Mutaher Rashad al-MasriMinister of Finance–Numan Salih al-SuhaybiMinister of Foreign and Expatriate Affairs–Abu Bakr al-QirbiMinister of Industry and Trade–Yahya al-MutawakilMinister of Justice–Ghazi al-AghbariMinister of Oil and Mineral Resources–Ameer Salem al-AidarousAmbassador to the United States–Abdulwahab Abdulla Al-HajjriAmbassador to the United Nations–Abdullah al-Said

The Republic of Yemen maintains an Embassy in the United States at 2319 Wyoming Ave. NW, Washington, DC 20008 (tel: 202-965-4760).

ECONOMYAt unification, both the YAR and the PDRY were struggling, underdeveloped economies. In the north, disruptions of civil war (1962-70) and frequent periods of drought had dealt severe blows to a previously prosperous agricultural sector. Coffee production, formerly the north’s main export and principal form of foreign exchange, declined as the cultivation of qat increased. Low domestic industrial output and a lack of raw materials made the YAR dependent on a wide variety of imports.

Remittances from Yemenis working abroad and foreign aid paid for perennial trade deficits. Substantial Yemeni communities exist in many countries of the world, including Yemen’s immediate neighbors on the Arabian Peninsula, Indonesia, India, East Africa, the United Kingdom, and the United States. Beginning in the mid-1950s, the Soviet Union and China provided large-scale assistance to the YAR. This aid included funding of substantial construction projects, scholarships, and considerable military assistance.

In the south, pre-independence economic activity was overwhelmingly concentrated in the port city of Aden. The seaborne transit trade, which the port relied upon, collapsed with the closure of the Suez Canal and Britain’s withdrawal from Aden in 1967. Only extensive Soviet aid, remittances from south Yemenis working abroad, and revenues from the Aden refinery (built in the 1950s) kept the PDRY’s centrally planned Marxist economy afloat. With the dissolution of the Soviet Union and a cessation of Soviet aid, the south’s economy basically collapsed.

Since unification, the government has worked to integrate two relatively disparate economic systems. However, severe shocks, including the return in 1990 of approximately 850,000 Yemenis from the Gulf states, a subsequent major reduction of aid flows, and internal political disputes culminating in the 1994 civil war hampered economic growth.

After the conclusion of the war, the government entered into agreement with the International Monetary Fund (IMF) to institute a structural adjustment program. This IMF program included major financial and monetary reforms, including floating the currency, reducing the budget deficit, and cutting subsidies. Difficulties implementing the reform program led the agreement to lapse In August of 2010, a new IMF program was implemented where Yemen received an Extended Credit Facility worth approximately $370 million that would be disbursed over three (3) years. In order to receive the funds, Yemen agreed to implement various economic reforms in the areas of revenue diversification/tax system reform, subsidy reductions and governmental spending. Due to the political instability that erupted in early 2011, that program has been put on hold.

The World Bank also is present in Yemen, with 20 active projects (as of 2011) in the areas of public sector governance, water, and education. Since 1998, the government of Yemen has sought to implement World Bank economic and fiscal recommendations. In subsequent years, Yemen has lowered its debt burden through Paris Club agreements and restructuring U.S. foreign debt.

Current U.S. Government commercial activities are focused on advocating on behalf of U.S. companies, protecting existing American business interests in the country, and diversifying Yemen’s economy toward non-petroleum sectors of the economy.

While Yemen is a relatively minor oil producer when compared to its Gulf neighbors, energy exports generate the majority of governmental revenue. Production peaked in 2001 at approximately 440,000 barrels per day (bbl/d) and has declined since. In 2010, the country produced, on average,approximately 260,000 bbl/d. Following a minor discovery in southern Yemen in 1982, an American company found an oil basin near Marib in 1984, and a small oil refinery began operations two years later. A Soviet discovery in the southern governorate of Shabwa proved only marginally successful.. A Western consortium began exporting oil from Masila in Hadramaut governorate in 1993, and production there reached 420,000 bbl/d in 1999. There are new finds in the Jannah (formerly known as the Joint Oil Exploration Area) and east Shabwah blocks.

In November 2005, Hunt Oil’s 20-year contract for the management of Block 18 fields ended. Despite agreement with the Government of Yemen on a 5-year extension, the Republic of Yemen Government abrogated the agreement via a parliamentary vote that was not called for in the contract. The U.S.-based Hunt Oil company sued Yemen in a Paris-based International Chamber of Commerce commercial arbitration court in 2005. The court’s decision has been kept confidential, according to both sides’ wishes. Hunt Oil continues to operate in Yemen, although in a much smaller oil exploration block.

Yemen’s oil exports in 1995 generated approximately $1 billion in revenues. By 2010, oil exports had grown to approximately $5.5 billion and comprised roughly 70 percent of governmental revenue. Crude oil production has declined steadily in past years due to dwindling reserves, lack of maintenance on some equipment, and a lack of new investment in exploration activities.

Oil located near Marib contains associated natural gas. Yemen’s natural gas reserves are currently being exported in the form of liquefied natural gas (LNG), and projects are underway that utilize Yemen’s LNG to fuel several natural gas-fired power plants. The Yemen LNG project at the port of Balhaf on the Gulf of Aden became commercially operational in October 2009 and will generate much needed revenue to partially offset declining oil revenues.

FOREIGN RELATIONSThe geography and ruling Imams of north Yemen kept the country isolated from foreign influence before 1962. The country’s relations with Saudi Arabia were defined by the Taif Agreement of 1934, which delineated the northernmost part of the border between the two kingdoms and set the framework for commercial and other intercourse. The Taif Agreement has been renewed periodically in 20-year increments, and its validity was reaffirmed in 1995. Relations with the British colonial authorities in Aden and the south were usually tense.

The Soviet and Chinese Aid Missions established in 1958 and 1959 were the first important non-Muslim presence in north Yemen. Following the September 1962 revolution, the Yemen Arab Republic became closely allied with and heavily dependent upon Egypt. Saudi Arabia aided the royalists in their attempt to defeat the Republicans and did not recognize the Yemen Arab Republic until 1970. Subsequently, Saudi Arabia provided Yemen substantial budgetary and project support. At the same time, Saudi Arabia maintained direct contact with Yemeni tribes, which sometimes strained its official relations with the Yemeni Government. Hundreds of thousands of Yemenis found employment in Saudi Arabia during the late 1970s and 1980s.

In February 1989, north Yemen joined Iraq, Jordan, and Egypt in forming the Arab Cooperation Council (ACC), an organization created partly in response to the founding of the Gulf Cooperation Council (GCC), and intended to foster closer economic cooperation and integration among its members. After unification, the Republic of Yemen was accepted as a member of the ACC in place of its YAR predecessor. In the wake of the 1st Gulf war, the ACC has remained inactive. Yemen is not a member of the GCC although it is allowed limited participation in some organizational affairs.

British authorities left southern Yemen in November 1967 in the wake of an intense terrorist campaign. The people’s democratic Republic of Yemen, the successor to British colonial rule, had diplomatic relations with many nations, but its major links were with the Soviet Union and other Marxist countries. Relations between it and the conservative Arab states of the Arabian Peninsula were strained. There were military clashes with Saudi Arabia in 1969 and 1973, and the PDRY provided active support for the Dhofar rebellion against the Sultanate of Oman. The PDRY was the only Arab state to vote against admitting new Arab states from the Gulf area to the United Nations and the Arab League. The PDRY also provided sanctuary and material support to various international terrorist groups.

Yemen is a member of the United Nations, the Arab League, and the Organization of the Islamic Conference. Yemen also participates in the nonaligned movement. The Republic of Yemen accepted responsibility for all treaties and debts of its predecessors, the YAR and the PDRY. Yemen has acceded to the nuclear nonproliferation treaty.

The 1st Gulf war and its aftermath dramatically affected Yemen’s foreign relations. As a member of the UN Security Council (UNSC) in 1990 and 1991, Yemen abstained on a number of UNSC resolutions concerning Iraq and Kuwait and voted against the “use of force resolution.” As Yemen was seen as supporting Iraq in the 1st Gulf war, Western and Gulf Arab states reacted by curtailing or canceling aid programs and diplomatic contacts. At least 850,000 Yemenis returned from Saudi Arabia and the Gulf.Subsequent to the liberation of Kuwait, Yemen continued to maintain high-level contacts with Iraq. This hampered its efforts to rejoin the Arab mainstream and to mend fences with its immediate neighbors. In 1993, Yemen launched an unsuccessful diplomatic offensive to restore relations with its Gulf neighbors. Some of its aggrieved neighbors actively aided the south during the 1994 civil war. Since the end of that conflict, tangible progress has been made on the diplomatic front in restoring normal relations with Yemen’s neighbors, as a result,the Omani-Yemeni border was officially demarcated. In the summer of 2000, Yemen and Saudi Arabia signed an International Border Treaty settling a 50-year-old dispute over the location of the border between the two countries. However, border issues continue as Saudi Arabia attempts to demarcate and control its border with Yemen. Yemen also settled its dispute with Eritrea over the Hanish Islands in 1998.

U.S.-YEMEN RELATIONSThe United States established diplomatic relations with the Imamate in 1946. A resident legation, later elevated to embassy status, was opened in Taiz (the capital at the time) on March 16, 1959 and moved to Sanaa in 1966. The United States was one of the first countries to recognize the Yemen Arab Republic, doing so on December 19, 1962. A major U.S. Agency for International Development (USAID) program constructed the Mocha-Taiz-Sanaa highway and the Kennedy memorial water project in Taiz, as well as many smaller projects. On June 6, 1967, the YAR, under Egyptian influence, broke diplomatic relations with the United States in the wake of the Arab-Israeli conflict of that year. Secretary of State William P. Rogers restored relations following a visit to Sanaa in July 1972, and a new USAID agreement was concluded in 1973.

On December 7, 1967, the United States recognized the People’s Democratic Republic of Yemen and elevated its Consulate General in Aden to embassy status. However, relations were strained. The PDRY was placed on the list of nations that support terrorism. On October 24, 1969, south Yemen formally broke diplomatic relations with the United States. The United States and the PDRY reestablished diplomatic relations on April 30, 1990, only 3 weeks before the announcement of unification. However, the embassy in Aden, which closed in 1969, was never reopened, and the PDRY as a political entity no longer exists.

During a 1979 border conflict between the Yemen Arab Republic and the People’s Democratic Republic of Yemen, the United States cooperated with Saudi Arabia to greatly expand the security assistance program to the YAR by providing F-5 aircraft, tanks, vehicles, and training. George H.W. Bush, while Vice President, visited in April 1986, and President Ali Abdullah Saleh visited the United States in January 1990. The United States had a $42 million USAID program in 1990. From 1973 to 1990, the United States provided the YAR with assistance in the agriculture, education, and health and water sectors. Many Yemenis were sent on U.S. government scholarships to study in the region and in the United States. There was a Peace Corps program with about 50 volunteers. The U.S. Information Service operated an English-language institute in Sanaa.

In 1990, as a result of Yemen’s actions in the Security Council following the Iraqi invasion of Kuwait, the United States drastically reduced its presence in Yemen, including canceling all military cooperation, non-humanitarian assistance, and the Peace Corps program. USAID levels dropped in FY 1991 to $2.9 million, but food assistance through the PL 480 and PL 416 (B) programs continued through 2006. In 2006, the U.S. Department of Agriculture provided 30,000 metric tons of soybean meal that were sold for approximately $7.5 million to finance programs in support of Yemen’s agricultural sector.

The United States was actively involved in and strongly supportive of parliamentary elections in 1993 as well as the 2006 presidential and local council elections, and continues working to strengthen Yemen’s democratic institutions. The USAID program, focused in the health field, slowly increased to $8.5 million in FY 1995, but experienced a brief hiatus after 2000. In 2003, USAID reopened its mission in Yemen with assistance principally focused on basic education, maternal and child health, and agriculture. The program has increased substantially since then; FY 2010 funding for USAID programs in Yemen was approximately $48 million with programs focused primarily on livelihoods and governance. In addition, since 2004 the Middle East Partnership Initiative (MEPI) has provided more than $2.7 million in grants directly to Yemeni organizations supporting civil society. Approximately 30 local non-governmental organizations (NGOs) have implemented programs in priority areas such as anti-money laundering/counterterrorism finance and early childhood marriage.

Defense relations between Yemen and the United States are improving rapidly, with the resumption of International Military Education and Training assistance and the transfer of military equipment and spare parts. In FY 2010 approximate funding for U.S. Foreign Military Financing (FMF) for Yemen was $12.5 million, International Military Education and Training (IMET) was $1 million, and Non-Proliferation, Anti-Terrorism, Demining and Related Programs (NADR) was $5 million. In FY 2010 Yemen also received approximately $5 million in Economic Support Funds (ESF), $35 million in development assistance, and $155 million in Section 1206 funding.

In November 2006, a World Bank-sponsored international donor conference in London resulted in pledges of $4.7 billion for Yemen’s development. The funds were to be disbursed between 2007 and 2010; however, delivery was much slower than expected and remains incomplete. In January 2010, the U.K. hosted a ministerial meeting in London, gathering Western and Arab countries with interests in Yemen, known as the “Friends of Yemen.” Through the formation of two working groups on “Economy and Governance” and “Justice and Rule of Law,” the “Friends” process has helped identify short-term priorities and develop a coordinated response to Yemen’s many challenges. The “Friends” met at another ministerial-level meeting in New York in September 2010 and the process of implementing their recommendations remains ongoing..